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Is government dissatisfied with RBI's functioning? No, says Jaitley

The government and the RBI under the previous Governor Urjit Patel were at loggerheads on several issues, including over appropriate size of reserves which the central bank should hold

Press Trust of India  |  New Delhi 

Arun Jaitley
Finance Minister Arun Jaitley

Minister Arun Friday replied in negative to a question whether the government was not satisfied with the functioning of the

In a written reply to the Lok Sabha, the minister quoted a report of International Monetary Fund (IMF) which said the supervision and regulation by the RBI was strong and improved in recent years.

"No, madam," said to a question whether the government is not satisfied about the functioning of the RBI.

The government and the RBI under the previous Governor Urjit Patel were at loggerheads on several issues, including over appropriate size of reserves which the central bank should hold.

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There were also differences over the lending to the small and medium enterprises, and norms concerning supervisory action over public sector under Prompt Corrective Action (PCA) of the RBI.

The differences reached a flash point with Patel suddenly quitting the RBI on December 10.

Patel's resignation was being speculated right from the time the government cited a never-before-used provision of the RBI Act to get him to consider its views on relaxing lending norms for segments such as small and medium enterprises, appropriate size of reserves the central bank must maintain and easing norms for weak

Earlier, RBI Deputy Governor Viral Acharya had raised concerns over the autonomy of the central bank, triggering speculations that the government and the central bank were not same page on many issues.

First Published: Fri, December 28 2018. 20:10 IST
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