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Government, RBI should have continuous dialogue to address problems affecting economy: VP Naidu

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venkaiah Naidu

New Delhi | In apparent reference to the recent spat between the government and the Reserve Bank, Vice President M Venkaiah Naidu Tuesday said there should be a regular dialogue between the two in the boardroom to arrive at solutions to address problems affecting economy.

Referring to the issue of liquidity crunch, Naidu said the problem was because few “black sheep” who have taken the system for ride, affecting the entire industry.

“All of us have to introspect. Politicians… and the industry. A few people.. have taken the system for a ride and banks lent money left and right… “RBI was not doing things at that time and now they have tightened everything, so there are there are problems…,” he said.

Naidu said these problems have to analysed and understood. The Reserve Bank of India (RBI) and the government of India must have a regular continuous dialogue. “There is no question of who is powerful or who is final. Final are the people and their interest. All these systems are created to facilitate people’s welfare.

“So they should have to have a dialogue within their boardroom rather than discussions through media and then come to some solutions addressing the actual problems,” he said while addressing the diamond jubilee celebrations of the Confederation of Indian Textile Industry (CITI) here.

Amid growing tensions with the central bank, the Finance Ministry had earlier sought discussions under the never-used-before Section 7 of the RBI Act which empowers the government to issue directions to the RBI Governor. RBI Deputy Governor Viral Acharya had in a speech last month talked about the independence of the central bank, arguing that any compromise could be “potentially catastrophic” for the economy.

On November 19, the RBI board had held a marathon meeting amid a rift between the central bank and the government over several issues including how much capital the apex bank needs, lending norms for small and medium enterprises and rules for weak banks.

Following the meeting, the RBI and the government agreed to refer to an expert committee the contentious issue of appropriate size of reserves that the RBI must hold, while restructuring of stressed loans of small businesses would be considered by the central bank.

Vice-President Naidu further said India was the most favoured destination for investment and global organisations like World Bank and World Economic Forum, which are of the view that if the country continues with its reform process, it will become the third-largest economy in the world. He also called upon the textiles industry, which contributes more than 3 per cent to the GDP, to adopt new innovative technology in line with the demands of 4th industrial revolution.

Addressing the gathering, Textiles Minister Smriti Zubin Irani said the government was committed for the growth of the textile industry.

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Hasmukh Adhia rumoured to be the next RBI governor: sources

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Hasmukh Adhia

New Delhi | After the resignation of Reserve Bank of India governor Urjit Patel on Monday, former Finance Secretary Hasmukh Adhia is rumoured to be the next RBI governor, as per unconfirmed sources.

Adhia, a 1981-batch Gujarat cadre officer of the Indian Administrative Services (IAS), served as a secretary in the Department of Financial Services after Narendra Modi became the Prime Minister.  A close of aide of  PM Narendra Modi and Arun Jailtley retired on November 30 this year.

Adhia also served as the Union Revenue Secretary and Union Financial Services Secretary, in the Union Government which makes his case stronger for the post of the RBI governor.

Earlier Urjit Patel on Monday resigned from the post of Reserve Bank of India (RBI) governor. Patel’s three year team was to end in September 2019. Patel is also the first RBI governor to resign since 1990.

Submitting his resignation, Urjit Patel cited personal reasons and stepped down with immediate effect. He said, “On account of personal reasons, I have decided to step down from my current position effective immediately. It has been my privilege and honour to serve in the Reserve Bank of India in various capacities over the years,” Urjit Patel said in a statement. “The support and hard work of RBI staff, officers and management has been the proximate driver of the Bank’s considerable accomplishments in recent years. I take this opportunity to express gratitude to my colleagues and Directors of the RBI Central Board, and wish them all the best for the future,” he added.

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Breaking: Vijay Mallya to be extradited to India

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Vijay Mallya

London | In what could be termed as end of the party for the king of good time, Liqour baron Vijay Mallya to be extradited to India as the London court gives its nod for the same

London’s Westminster Magistrates Court orders the extradition of Vijay Mallya to India. The Court has further referred the matter of extradition of Vijay Mallya to India to the Secretary of State. The Central beaurue of Investigation has welcomed the decision of the London’s court. Chief Magistrate Judge Emma Arbuthnot announcing the order stated that he found prima facie a case against Vijay Mallya for fraud, conspiracy and money laundering.

Speaking on the extradition CBI said,”We hope to bring him soon and conclude the case. CBI has its own inherent strengths. We worked hard on this case. We are strong on Law and facts and we were confident while pursuing extradition process.”

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Urjit Patel resigns from RBI governor’s post

Anil Rajpurohit

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Urjit Patel

New Delhi | Urjit Patel on Monday resigned from the post of Reserve Bank of India (RBI) governor. Patel’s three year team was to end in September 2019. Patel is also the first RBI governor to resign since 1990.

Submitting his resignation, Urjit Patel cited personal reasons and stepped down with immediate effect. He said, “On account of personal reasons, I have decided to step down from my current position effective immediately. It has been my privilege and honour to serve in the Reserve Bank of India in various capacities over the years,” Urjit Patel said in a statement. “The support and hard work of RBI staff, officers and management has been the proximate driver of the Bank’s considerable accomplishments in recent years. I take this opportunity to express gratitude to my colleagues and Directors of the RBI Central Board, and wish them all the best for the future,” he added.

RBI Governor Urjit Patel earlier appeared before a parliamentary panel to brief on demonetisation and NPA situation in the public sector banks, among other issues. The RBI Governor appeared before the panel days after the central bank’s face-off with the finance ministry over issues ranging from appropriate size of reserves to be maintained by RBI to easing of lending norms for small and medium enterprises.

Business Editor of HW Business and Finance Akhilesh Bhargav states it is not only the failure of the finance ministry but the board of the Reserve Bank of India.

Urjit Patel who was appointed as the 24th Governor of the Reserve Bank of India (RBI) succeded Raghuram Rajan on 4 September 2016.

 

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