The key RBI panel can be tested at the jury's examination

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MUMBAI: The role and powers of the Central Board Committee of the Reserve Bank of India (RBI) are in the spotlight. This will be a key element in the governance debate at RBI and the responsibilities of its board of directors.

The CWB, which has the same powers as the central bank's board of directors, meets every Wednesday and is authorized to approve major decisions when only one outside director attends the governor's meeting and vice-governors.

The government, which believes that the structure and influence of CCC may be disproportionately high, is in favor of reconsidering the role and even the composition of the committee.

The central council committee draws its powers from the general rule of the RBI, which was drafted in 1949 during the nationalization of the central bank.

"The government's attention to CCB was drawn after the committee approved the February 12 RBI circular on non-performing badets. The rules, which are 70 years old, allow for the presence of only one outside director of the RBI board of directors so that the committee can clarify a decision as important as this one. Is this the way to go? That's what the government thinks, "said a person familiar with the subject.

gr "title =" gr "/> <figcaption/> </figure> </p> <p> The February directive of the Reserve Bank of India had stirred a nest of hornets and businesses, lenders and the government were fiercely opposed. </p> <p> Under the general rules of the RBI, the CWB has all the powers necessary to handle all the usual duties of a banking regulator, except for matters specifically reserved by law to the central government or to the central council. </p> <p> "The need to revive the CWB would be an important part of any discussion of the" governance of the RBIs "that the government wants to include on the agenda of the next meeting of the board of directors (December 14), "said another person. . CWB meetings are held in Mumbai and members are allowed to participate by videoconference. Senior officials familiar with the topic under discussion are also invited to attend the meeting. </p> <p> The fundamental question in the conflict between RBI and New Delhi was whether the central board of directors should play an active role as the board of directors of a company. </p> <p> Indeed, long before the differences between RBI and the government fell into the media, the Department of Economic Affairs of the Ministry of Finance identified two problems that later emerged as the main reasons for the fracture: the first regarding RBI's governance and secondly, it was the capital framework – or the minimum capital / reserves needed by the monetary authority. </p> <p><figure clbad= graphic "title =" graphic "/> <figcaption/> </figure> </p> <p> As part of the proposed discussion on the governance framework, the government had suggested the creation of various committees – including experts from the field but not government officials – who would share their views and findings with the council of the government. 39, central administration of the RBI. </p> <p> While some members of the RBI's board of directors believe that there are several committees – especially for matters such as banking regulations – they report to the board of directors as a structure similar to that of some other central banks, but fear that it will dilute the role of the banking regulator. </p> <p> "In the past, government candidates often missed board meetings. The decisions of the CWB were then presented to the board. We are now moving to another direction, where the board would lead. Even without a discussion of governance, the primacy of the council was somewhat established at the last meeting (November 19), when purely operational issues were discussed for the first time by the board, "said a senior official. RBI. </p> <p> The "governance" agenda, which was to be resumed at the last board meeting, was deferred to the government, as was the RBI preferring to tackle less controversial issues. </p> <p> "Even now, it must be pursued gently so that RBI and the government find a common ground. The government also can not think that the RBI is a department of the Ministry of Finance nor should it believe that the central bank should be saved from its board of directors, "said a source. AND was the first to report on November 5 that the government had proposed a discussion on "RBI governance and the role of the board". </p> <p> The council may also discuss ways to address the NBFC crisis, but it is unlikely that it is considering a special window of liquidity unless the situation worsens dramatically.<br /> </p> </div> <p><script></p> <p> if (geolocation && geolocation! = 5) { ! function (f, b, e, v, n, t, s) {if (f.fbq) return; n = f.fbq = function () {n.callMethod? n.callMethod.apply (n, arguments): n.queue.push (arguments)}; if (! f._fbq) f._fbq = n; n.push = n; n.loaded =! 0; n.version = 2.0 & # 39 ;; n.queue = []; t = b.createElement (e); t.async =! 0; t.src = v; s = b.getElementsByTagName (e) [0]; s.parentNode.insertBefore (t, s)} (window, document, & quot; script & # 39; & # 39; https: //connect.facebook.net/en_US/fbevents.js&#39;); fbq (& # 39 ;, & # 39; 338698809636220 & # 39;); fbq ("track", "Pageview"); }</p> <p></script></pre> </pre> [ad_2] <br /><a href=Source link

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