Letter to BS: Confrontation between govt, RBI not doing any good to country

Apropos “Fin min, RBI divided on NBFC liquidity situation” by Somesh Jha, Arup Roychoudhury and Shrimi Choudhary (October 31); this continuing public confrontation between the government and the Reserve Bank of India (RBI) is not doing any good to the country's image, leave aside sorting the NBFC liquidity issue. Both sides must use restraint — as articulated in your editorial “Avoidable path” on October 30 — and sit down for a detailed discussion without any preconceived notions in mind. If the honorable governor adopts a less heroic approach and looks at the problem from a holistic angle, I am certain he will find Arun Jaitley also equally responsive, and an amicable solution — within the laid down principles — will be found. Disagree as much as you like in private, but don't create a public tamasha.

If regulatory powers need a review, Parliament will do its bit; till then, the RBI’s stock answer to all lapses can’t be “regulatory powers are weak” as indeed it has done in the case of Punjab National Bank. The finance minister’s comment on “RBI not checking reckless lending by the banks” has some truth in it. The RBI can't just shrug it all off claiming “lack of power”. Equally, the government should reconsider the idea of an independent payments regulatory board and review the norms with the RBI and arrive at a meaningful solution.

Krishan Kalra  Gurugram

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