RBI: Government could push RBI to lift loan restrictions on some banks

The Indian government will push its central bank to loosen the lending restrictions imposed on some failing banks and review the rules governing its operation at a meeting of the board of directors. Next month, announced informed sources.

Members, including nominees appointed by the government, will insist that some of the most fragile banks be removed from the so-called quick corrective action list, particularly those that have been consistent in the collection of debt claims. suspense, said the population, asking not to be identified because the plan is not public. The list has 11 state lenders, which limits their lending capacity.

The proposals suggest another potentially tense board meeting on December 14 following a dispute between the Ministry of Finance and the central bank over a number of issues, including the transfer of surplus funds, the easing loan rules and providing liquidity in the shade. -banking sector. Both parties announced a truce at the last board meeting held this month.

The Reserve Bank of India will also present a plan to prevent banks from accumulating bad debts rather than simply penalizing weak lenders with loan restrictions, the population said. Board members can also ask the RBI to develop a quick preventative plan, in addition to calling for tighter surveillance oversight on issues such as the transmission of monetary policy, they said.

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