RBI and govt signal truce on demand for transferring surplus reserves

A crucial meeting of the RBI's central board was held on Monday amid a rift between the central bank and the government over key issues

The Reserve Bank of India (RBI) on Monday signalled a compromise with the government by agreeing to study its demands, including the transfer of surplus reserves -- an issue that had triggered a public spat between the central bank and its political bosses.

The RBI's board met for nine hours in Mumbai and decided to set up an expert committee to examine the central bank's Economic Capital Framework (ECF). It also decided that the central bank's Board for Financial Supervision (BFS) will examine the issues concerning the banks that are under the Prompt Corrective Action framework.

The membership and terms of reference