Letter to BS: Payments system should remain with RBI, says Urjit Patel

Deputy Governor Viral Acharya's emphasis on the need for continuing with the PCA framework is also noteworthy

It was heartening to note the Reserve Bank of India (RBI) Governor Urjit Patel has emphatically made public a strongly worded dissent note to certain recommendations of the government panel on changes to the payment and settlement laws. Patel is right when he says that the payments system should necessarily remain with the RBI. We are all aware of what happened in the case of Infrastructure Leasing and Financial Services.

Deputy Governor Viral Acharya’s emphasis on the need for continuing with the prompt corrective action (PCA) framework, which has evoked criticism from many quarters including the government, is also noteworthy. Let us accept the fact that without the PCA, some banks would have incurred huge losses and more tax-payer money would have been pumped in to recoup the bank’s financial losses.

Let us hope the government will take a pragmatic and balanced view on both.

Satish Murdeshwar, Pune

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