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Frictions between the bank and the government relate to three fundamental problems.
The board of directors of the Reserve Bank of India (RBI) is meeting today in Mumbai amid an unprecedented public feud between the government and the central bank, which alleges that the center would have tried to undermine his autonomy. The liquidity crisis, the lending restrictions imposed on state-owned banks and the transfer of excess reserves should be discussed at the meeting. After de-escalation efforts, RBI leader Urjit Patel is not expected to resign – as some reports speculate – but sources predict a shock at the meeting on the center's request to create a special window of liquidity for non-bank financing companies (NBFCs). According to another strong point, the government has proposed a supervisory role for the board of directors of the RBI, which has several of its candidates.
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