RBI's cash reserves meant periods of stress and not the normal needs of the government: Urjit Patel

RBI leader Urjit Patel's file.

New Delhi: The Governor of the Reserve Bank of India (RBI), Urjit Patel, told a parliamentary committee that the Current level It is necessary to take into account the foreign currency reserves of the central bank, given the international volatility and the maintenance of high solvency.

According to sources cited by Patel, these reserves are intended "for periods of stress and not for normal needs". Report of India

The Governor appeared before a panel to discuss the situation of demonetization and non-performing badets (NPAs) .It has been reported on numerous occasions that Mr. Patel avoided controversial issues such as section 7 of the RBI Act, NPA. and the autonomy of the central bank.
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Patel's comments on excess reserves are significant as it was one of the main areas of contention between the central bank and the government over the unprecedented divide.
The government reportedly claimed Rs 3.6 for the RBI's cash reserve, but the finance ministry rejected the charge. Arun Jaitley said the government did not need the money for the next six months.

In the past, the RBI has stated that a large part of its reserves, or nearly 28%, or 9.7 lakh crores of rupee, is notional and should not be affected.

At the meeting of its board of directors on November 19, RBI officials agreed to set the level of central bank reserves, adding that a larger transfer of funds to the government will only be done if a committee recommends it. The Ministry of Finance and the RBI will set up a joint committee for this project.

Patel told the committee that there was no stress in the economy. Finance Minister Arun Jaitley was in agreement with the governor and said in an interview last week that the financial situation of the Center was comfortable.

Opposition party leaders such as the Trinamool Congress and Congress raised many questions at the governor's committee meeting on the RBI. loses control over its autonomy and its gap with the Center. Patel will submit written answers to the questions in a week.

Patel said that the effects of demonetization were short-lived and that this had led to a growth in digital transactions across India. He said the credit flow had exceeded 15% and that inflation was under control at 4%.