RBI deputy governor Viral Acharya calls for independence, while the central bank is under pressure to ease credit for small businesses

While the RBI's central council has differing views on the issue, some other part-time, unofficial members support full-time central bank administrators.

Although the standoff between the RBI and the government continues to worsen and Vice Governor Viral Acharya has recently called for the independence of the central bank, pressure on the RBI to lighten the credit granted to small businesses and loosening the rules on lending has also increased. A group of unofficial administrators recently appointed to the MSMI board of directors of the RBI has ceased to call for a relaxation of the central bank's PCA framework in order to guarantee a better credit flows to distressed sectors, at a time when growth appears to be slowing down.

The Indian Express said, citing unidentified sources, that S Gurumurthy of Swadeshi Jagran Manch, who is now part-time and unofficial director of the RBI central council, has been making this request for a long time.

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"Some other government-appointed administrators, including former cooperative banker Satish Marathe, as well as Revathy Iyer, former head of India's auditing and accounting department, and RIS's chief executive, Sachin Chaturvedi. , have also diverged with the full-time directors of RBI, "Express reported.

Position of the RBI

While the RBI's central council has differing views on the issue, some other part-time, unofficial members support full-time central bank administrators. The central bank is also of the opinion that the withdrawal of banks from the PCA framework is in conflict with RBI's position to create a "sustainable banking" environment.

RBI data

The gross bank credit extended by the RBI until the end of August 2018 shows that an increase of only 1.9% year on year was noted by the credit sector. While the medium-sized business credit grew 6.5%, micro and small businesses saw a 2.6% increase, according to RBI data. However, credit to the services sector grew by a phenomenal 26.7%. The MSME segment represents a meager 6% of gross bank credit.