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Urjit Patel's resignation: What RBI, Modi govt locked horns over

During Urjit Patel's tenure as governor, RBI had run-ins with the government on numerous issues

BS Reporter 

RBI Governor Urjit Patel attends the customary post monetary policy review press conference, in Mumbai on Wednesday, June 06, 2018.

During Urjit Patel’s tenure as governor, the had run-ins with the government on a number of issues. Here are some of the instances:


Financial Resolution and Deposit Insurance Bill 2017

Govt: Proposed a resolution corporation for financial firms in distress

RBI: Opposed various provisions, including the role of the corporation to avoid conflicts of jurisdiction

Economic capital framework

Govt: Review rules to allow to part with more surplus funds to the government

RBI: Need a strong balance sheet to perform critical functions

Chairperson of Economic capital framework

Govt: Batted for former governor Bimal Jalan

RBI: Wanted ex-deputy governor Rakesh Mohan as the panel head

Regulatory powers over public, private banks

Govt: RBI has wide-ranging powers over PSBs

RBI: Regulatory powers over weaker than over private banks

Regulatory capital norms

Govt: Align them with global norms

RBI: Important to continue; any slack will be harmful

NBFC liquidity

Govt: Provide special refinance window and take other measures

RBI: Not a systematic issue; no need to act as lender of last resort for NBFCs

on NPAs

Govt: Dilute the norms to help power firms

RBI: No relaxation; duty-bound to resolve stressed assets in a time-bound manner

Norms for payments system

Govt:Proposed an independent payments regulatory board

RBI:Released a dissent note to say the board must remain within overall structure of RBI

RBI nominee on PSB boards

Govt: Gives us comfort

RBI: Our presence on boards is a conflict of interest

Governance reform in RBI

Govt: Need for participation of independent directors to ensure meetings are not closed doors

RBI: Governance structure robust; proposed minimal changes from its end


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First Published: Mon, December 10 2018. 23:45 IST
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