{"id":36174,"date":"2018-11-01T19:38:42","date_gmt":"2018-11-01T14:08:42","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=36174"},"modified":"2018-11-16T16:47:43","modified_gmt":"2018-11-16T11:17:43","slug":"tussle-for-power-whats-the-rbi-government-stand-off","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/tussle-for-power-whats-the-rbi-government-stand-off\/","title":{"rendered":"Tussle for power: what&#8217;s the RBI-government stand-off?"},"content":{"rendered":"<p><a href=\"https:\/\/www.thehindu.com\/opinion\/op-ed\/tussle-for-power\/article25382524.ece\">Tussle for power: what&#8217;s the RBI-government stand-off?<\/a><\/p>\n<p><strong>News:<\/strong><\/p>\n<ol>\n<li>The article discusses about the simmering tensions between the Reserve Bank of India and the Centre which found spectacular release recently through a public speech by Deputy Governor Viral Acharya.<\/li>\n<\/ol>\n<p><strong>Important Facts:<\/strong><\/p>\n<ol>\n<li>A certain amount of creative tension is systemically in-built between Reserve Bank of India and Centre given their different perspectives.<\/li>\n<li>For example, Centre\u2019s concern is short-term and political while RBI\u2019s concern is long-term and technical.<\/li>\n<li>Though such tension is good for the economy, but there are few issues over which both the Centre and RBI are irked over each other.<\/li>\n<li><strong>Centre- RBI Conflict:<\/strong><\/li>\n<\/ol>\n<ul>\n<li><strong>Non-Performing Assets: <\/strong>Centre has refused to accept Governor Urjit Patel\u2019s point that the RBI is hobbled by lack of adequate powers in regulating public sector banks to handle the non-performing assets crisis.<\/li>\n<li>Though the RBI expresses concerns about not having enough powers over PSBs but it does have nominee directors on bank boards which leads physical inspection and financial audits at banks.<\/li>\n<li><strong>Forex reserve and fiscal deficit: <\/strong>The Centre is eyeing RBI\u2019s burgeoning reserves to bridge its fiscal gap which RBI resents.<\/li>\n<li><strong>Payments regulator:<\/strong> The Centre is attempting to set up an independent payments regulator, which the RBI sees as encroachment of its jurisdiction.<\/li>\n<\/ul>\n<ol start=\"5\">\n<li><strong> Recent tensions: <\/strong>The government\u2019s intervention through the board sparked recent tensions between RBI and Centre as follows:<\/li>\n<\/ol>\n<ul>\n<li><strong>RBI\u2019s recent circular on stressed assets recognition: <\/strong>According to RBI recent circular, if a borrower delayed payment for even one day, he should be dragged to an insolvency court and the asset classified as a non-performing asset (NPA).<\/li>\n<li><strong>Diluted PCA: <\/strong>The Centre sees the prompt corrective action (PCA) framework by the RBI, which restricts weak banks from lending, as contributing to the liquidity crisis and wants it to be diluted.<\/li>\n<li><strong>Relaxed lending norms: <\/strong>Centre also wanted special dispensation by the RBI to help non-banking finance companies (NBFCs) apart from relaxed norms for lending to micro, small and medium enterprises.<\/li>\n<\/ul>\n<ol start=\"6\">\n<li><strong>\u00a0 Way forward: <\/strong><\/li>\n<\/ol>\n<ul>\n<li>The RBI could have heeded the Centre\u2019s signals on easing liquidity through extraordinary measures in addition to routine open market operations to ease the liquidity crises.<\/li>\n<li>So, the Centre and the central bank must talk behind closed doors and resolve their differences as mature entities in an amicable manner.<\/li>\n<\/ul>\n<p><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-36165\" src=\"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2018\/11\/points.jpg?resize=504%2C407&#038;ssl=1\" alt=\"\" width=\"504\" height=\"407\" srcset=\"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2018\/11\/points.jpg?w=504&amp;ssl=1 504w, https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2018\/11\/points.jpg?resize=150%2C121&amp;ssl=1 150w, https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2018\/11\/points.jpg?resize=300%2C242&amp;ssl=1 300w\" sizes=\"auto, (max-width: 504px) 100vw, 504px\" \/><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Tussle for power: what&#8217;s the RBI-government stand-off? News: The article discusses about the simmering tensions between the Reserve Bank of India and the Centre which found spectacular release recently through a public speech by Deputy Governor Viral Acharya. Important Facts: A certain amount of creative tension is systemically in-built between Reserve Bank of India and&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/tussle-for-power-whats-the-rbi-government-stand-off\/\">Continue reading <span class=\"screen-reader-text\">Tussle for power: what&#8217;s the RBI-government stand-off?<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[555],"tags":[577,221,217,578,772,394],"class_list":["post-36174","post","type-post","status-publish","format-standard","hentry","category-test-1","tag-centre-rbi-conflict","tag-economy","tag-gs-3","tag-payments-regulator","tag-prompt-corrective-action","tag-rbi","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704704963},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/36174","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=36174"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/36174\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=36174"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=36174"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=36174"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}