The governor of the RBI wants autonomy, does not target the government

NEW DELHI: The Governor of the Reserve Bank of India, Urjit Patel, strongly insisted Tuesday on the need to protect the central bank's autonomy before a parliamentary panel, while avoiding any direct criticism of the government.

Patel, who appeared before the Standing Committee on Finance chaired by Congress's Senior Member of Parliament Veerappa Moily, also denied questions about the government's decision to initiate a proceeding under Article 7, while stating that he would submit written answers to the contentious issues raised by the members.

"The governor seemed absolutely lucid to defend the autonomy of the RBI, even though he had chosen to be extremely dignified in his responses and to avoid any direct criticism of the government or of the Ministry of Finance in this context ", said to AND condition of anonymity.

In addition, Patel badured the members that he would provide details on the specifics of certain non-performing badets held by various banks. Some members said, however, that the RBI governor told the committee that the NPA levels were not as alarming.

Patel's testimony comes as a result of public disagreements between the RBI and the Ministry of Finance on the reduction of available liquidity in the credit markets.

In his responses, Patel claimed that RBI's autonomy was essential to both the interests of depositors and the credibility of the Indian economy before international rating agencies, according to those familiar with the lawsuit. He was responding to a series of questions raised by members of the panel of experts, including Digvijaya Singh, Bhartruhari Mahtab and Dinesh Tripathi, about the recent breakdown of the Ministry of Finance.

Some BJP members, including Nishikant Dubey and Shivkumar C Udasi, asked if India was too enthusiastic about Basel III standards, when many signatories did not follow it to the letter. In response, the governor of the RBI said that India's compliance was a matter of credibility in addition to its commitment to a G20 decision.

Dubey, the newspaper said, quotes an order from Adair Turner in his book "Between Debt and the Devil" to argue that the RBI must help the government in difficult times. He claimed that a committee appointed by the UPA regime had recommended that the Ministry of Finance play a more central role with respect to the RBI and the regulator of the markets, the Securities and Exchange Board of India. (Sebi), in order to resolve the contentious issues. Former Prime Minister Manmohan Singh is also a member of the standing committee.

With regard to the impact of demonetization on the economy, the governor apparently stated that it was only temporary, the volume of credit outflow having increased by 15%. , 5%. The digital economy has experienced significant growth, he said, adding that inflation had fallen to around 4%.

Patel projected solid prospects for the national economy and felt that the fall in international crude oil prices would give a boost to the Indian economy.

The committee will decide if it should recall the governor of the RBI after considering his written response that he should submit over the next two weeks. The standing committee was divided on demonetization and the BJP members, who make up the majority of the group, recently thwarted Moily's attempt to adopt a report on the subject by presenting dissenting notes.