RBI Governor Urjit Patel can not resign, convenes a meeting of the board of directors on November 19

RBI Governor Urjit Patel can not resign because he convened a meeting of the board of directors on November 19 to discuss the outstanding issues, which created a rift between the government and the government. central bank at last week's meeting.

the Finance Ministry said Wednesday that it respected the autonomy of the central bank.

"The autonomy of the central bank, under the RBI Act, is an essential and accepted requirement of governance. Indian governments have nurtured and respected this, "said the Department of Economic Affairs of the Ministry of Finance in a statement.

The government has not denied the information that it would have invoked Article 7 of the RBI Act of 1934 to begin discussions on various issues, including: easing the framework for prompt remedies and providing liquidity to non-bank finance companies (NBFCs).

According to this provision, the central government may give instructions to the RBI as it may "deem necessary in the public interest" after consultation with the RBI governor Section 7 deals with the "management" of the RBI.

The Ministry stated that the government and the RBI "must be guided by the public interest and the needs of the Indian economy."

The government and the RBI have recently disagreed over a mad the issues, including the easing of capital adequacy standards for public sector banks, by bringing some of them out of the PCA, forbearance from MSME and the liquidity situation in NBFCs.

"Extensive consultations take place between the government and the RBI from time to time. This also applies to all other regulators, "said the Ministry of Finance.

He added that the government had" never made public the subject of these consultations. "

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"The government, through these consultations, places its badessment on problems and proposes possible solutions." The government will continue to do it, "said the ministry in a concluding statement.

The split between the government and the RBI drew public attention when RBI deputy governor Viral Acharya delivered a strong speech in favor of the central bank's independence.

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Acharya also said that the central bank should have more powers to oversee public sector banks, maintain a strong balance sheet, and have a proper regulatory scope. This independence, he said, was necessary to ensure greater financial and macroeconomic stability.