RBI, Center trying to reduce the differences: sources

New Delhi:

The Reserve Bank of India and the government are slowly moving towards the resolution of some of their crucial meeting board disputes the central bank on November 19. Sources said the two sides were on the cusp of finding a solution to the two main differences – the liquidity and credit problems – that sparked the split that was made public earlier this month. This, according to sources, excludes any possibility of resignation of the governor of the RBI, Urjit Patel, anticipated by Congress in recent weeks.

In recent weeks, it has been noted that the government is putting pressure on the regulator to loosen restrictions on loans and to put back excess reserves. The government, Congress claimed, had demanded Rs. 1 million crowns from the central bank's reserves in the face of the huge budget deficit and the need to revive the economy over the course of a year election.

The bank, which had announced that it would inject 40,000 crores of rupees into the market in November, will release the first tranche of silver – 12,000 crores of rupees – on November 15.

In a statement, the bank announced that it had decided to buy government securities through open market operations. In October, the bank injected 36,000 million rupees into the market.

This decision comes as the lack of liquidity was worrying after one of the country's leading infrastructure finance companies.

The Reuters news agency announced that the bank was also considering easing restrictions on lending some banks, which is another controversial issue. The RBI had banned 11 state banks from obtaining credit, demanding that they reduce their bad debts and become profitable.

The craze for a solution arises as a result of a meeting between Prime Minister Narendra Modi and Bank Governor Urjit Patel. last week. Sources said the prime minister wanted to have a "firsthand account" and explain to Patel the point of view of his government, reported to NDTV some sources at the end of the meeting.

The tension between the bank and the government seemed poised to dissipate at the November meeting. 19, especially after the government had taken unprecedented step to invoke Article 7 of the RBI Act. This provision allows the government to consult and give instructions to the head of the RBI, invoking the public interest.

Congress leader and former finance minister of the union, P Chidambaram, said that it was likely that during the meeting, the government could try to force the hand of the head of the RBI – which had rejected the request for repayment of excess cash – through the intermediary of his men. table. In this case, the only two options will be to give up or resign, he said.