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Centre to step up pressure on RBI, Governor Urjit Patel may quit on Nov 19 – says a report

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Urjit Patel

[vc_row][vc_column][vc_column_text]The Centre wants RBI to transfer Rs 3.5 lakh crore to the finance ministry for recapitalisation of banks and to meet its other fiscal needs and media reports say it would invoke the never-before-used Section 7 of the RBI Act that allows it to dictate policy to the central bank.

This has been severely criticised by several experts, and a report in The Wire said it was “puzzling” since the actual contingency reserves on the RBI’s balance sheet is Rs 2.5 lakh crore which is roughly 6.5% of the central bank’s assets. “So one doesn’t know the origin of the Rs 3.5 lakh crore figure being cited by finance ministry,” said The Wire.

However, other media reports said the finance ministry is seeking to transfer a surplus of Rs 3.6 lakh crore, while the RBI reserves are Rs 9.59 lakh crore. The amount sought by the Centre amounts to more than a third of these reserves, these reports said.

The RBI has rejected the proposal stating that such a move could have an adverse effect on the macroeconomic stability and with low capital, RBI could end up losing its credibility, The Indian Express (IE), citing sources, had reported earlier.

What is more, according to IE report, sources said the ministry proposed that from 2017-18, the RBI should transfer the entire surplus to the government after taking into account its capital requirement. This is another area where the government and the RBI differ.

Reuters reported yesterday that according to three sources familiar with the government’s thinking, the Centre intends to keep pressing demands for the country’s central bank to relax lending curbs and hand over surplus reserves even if it risks provoking a resignation by the bank’s governor.

While there appeared to be a partial truce last week when the government said it respected the autonomy of the RBI, the sources said the government will turn up the heat at the bank’s central board of directors meeting on November 19.

RBI Governor Urjit Patel will be a key focus of the pressure from a group of directors who support the government’s position, according to the New Delhi-based sources, who declined to be named due to the sensitivity of the matter, said the Reuters report.

“We want the RBI governor to accept the priorities of the economy and to discuss these with board members,” said one of the sources, a senior government official with direct knowledge of deliberations. “If he wants to take decisions unilaterally, it will be better for him to quit.”

Investors and traders warn that if Patel quits it will create uncertainty and undermine India’s already-weak financial markets, the Reuters report said. They have been hurt in recent weeks because of defaults by a major financing company.

A finance ministry spokesman declined to comment for this story. The RBI did not respond to an email seeking comment.

Tensions between the Centre and RBI came to the fore last month when RBI Deputy Governor Viral Acharya gave a speech that blew the lid off a fractious dispute between the bank and the government of Prime Minister Narendra Modi on issues ranging from lending curbs to who controls the institution’s reserves.

Acharya said that undermining central bank independence could be “potentially catastrophic”, and he even cited meddling by the Argentine government in the affairs of its central bank in 2010 – prompting big drops in that nation’s financial markets – asa sign of how bad things can get.

For its part, government officials say they have been increasingly frustrated by the intransigence of Patel and his team to address its demands and engage in constructive dialogue.

The RBI has consistently pushed back against calls from the government to hand over more money from its reserves to help fund the fiscal deficit.

The Finance Ministry is seeking to transfer a surplus of Rs 3.6 lakh crore, more than a third of the total Rs 9.59 lakh crore reserves of the central bank, to the government, said Reuters. The government feels RBI has over-estimated its capital reserves requirements resulting in excess capital of Rs 3.6 lakh crore.

That’s why, said the Reuters report, it has proposed these funds be used to recapitalise public sector banks, help them expand their loan book and come out of the Prompt Corrective Action framework.

The RBI, however, feels strongly that using central bank reserves has pitfalls.

The ruling BJP is also keen to reduce curbs on the shadow banking sector and increase overall lending to small and medium-sized businesses. The aim is to help offset economic headwinds from low farm prices and high fuel prices ahead of a general election due by next May and key state elections in a few weeks.

“We will do everything to protect the interests of the economy,” one of the members of the RBI central board told Reuters, noting the governor and his team would have to “explain, defend and justify” their decisions at the board meeting.

It is unclear, though, how the government will seek to exert pressure through the RBI’s Central Board as the body is a largely symbolic one, which has never had a direct say in the bank’s directives and policies, according to two additional sources with knowledge of the law under which the central bank operates.

“The role of the board has typically been to supervise the workings of the RBI, like internal audit and recruitment. But the RBI is not really accountable to the board for regulatory and operational issues,” said one of the sources, saying this would only change if the government invokes Section 7 of the RBI Act.

“We don’t know whether the board will supersede the RBI in that case,” said the source. “This kind of situation has never arisen before.”

“Patel and his team must recognise the period of an invisible RBI board is over,” one of the New Delhi-based sources said, noting that the RBI will sooner or later have to fall in line.

Patel’s predecessor Raghuram Rajan defended the RBI’s call for autonomy saying that the central bank’s responsibility is to secure financial stability and it has the right to say “no” to government proposals that could lead to instability.

“The RBI is something like a seatbelt,”Rajan, who is a professor at the University of Chicago Booth School of Business, told CNBC-TV18.

“As a driver, being the government, it has the possibility of not putting on the seatbelt, but of course, if you don’t put on the seatbelt, you can get into an accident which can be quite severe,” he said.

NR Bhanumurthy, an economist at the National Institute of Public Finance and Policy, a New Delhi-based think tank that is partly funded by the finance ministry, said the RBI and the government were dealing with the same problem though there was a difference of opinion on how to solve it.

“While the government is looking for short-term solutions, the RBI is focused on long term solutions,” he said, adding that despite disagreements, both could resolve their differences. “If the RBI governor is forced to resign, it will be a huge setback for the economy.”

Reportedly, it was only in the last few weeks that the government has threatened to invoke its most lethal weapon, Section 7 of the RBI Act. According to the Act, the government may from time to time, the government may give directions to the RBI, after consultation with the governor on matters of public interest. While the Finance Ministry in its press statement did not explicitly state the section, but the usage of words like “public interest” did shed light on the ongoing tussle between the two entities.[/vc_column_text][/vc_column][/vc_row]

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Happy Birthday Mark Zuckerberg: Social media users wish Facebook co-founder on his 40th birthday

Born on May 14, 1984, Zuckerberg has grown from a Harvard dropout into a billionaire philanthropist, owning many tech ventures over the years. He started Facebook in 2004 and took it public in 2012.

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Mark Zuckerberg, co-founder and CEO of Facebook (Meta), is celebrating his 40th birthday on May 14. Zuckerberg, one of the most influential figures in the tech industry, has had a major impact on how people connect and communicate with each other all over the world.

At 40, Zuckierberg continues to lead Facebook and its parent company, Meta, towards new technological frontiers. Born on May 14, 1984, Zuckerberg has grown from a Harvard dropout into a billionaire philanthropist, owning many tech ventures over the years. He started Facebook in 2004 and took it public in 2012.

In 2021 the social media platform changed its name to Meta to shift the company’s focus to the metaverse. Under his leadership, Facebook has grown into a global platform with over 2.8 billion active users. Apart from this, he has also expanded his influence through the Chan Zuckerberg initiative, which is run by Zuckerberg and his wife Priscilla Chan and focuses on philanthropy in health, education, and scientific research with an investment of 99% of the couple’s wealth over their lifetime.

There has been a rise in the net worth of Mark Zuckerberg over the last few years. According to Forbes, his net worth stands at $177 billion, which makes him the 4th richest man in the world. Since Facebook (now Meta) acquired WhatsApp in 2014 for $19 billion, Mark Zuckerberg’s net worth has grown significantly.

In 2014 his net worth was approximately $26.1billion, which now stands at around $177 billion, which reflects a substantial increase in the net worth due to Meta’s expanding business and strategic acquisitions over the year.

Before Zuckerberg turned 40, he gifted himself a brand-new superyacht, Launchpad in March 2024. According to reports, Zuckerberg purchased $59 million worth of waterfront property on Lake Tahoe in California in 2019. He spends his money on luxury vehicles and owns a Acura TSX, a Honda Fit, and a black Volkswagon Golf GTI.

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Google restores delisted Indian apps after government intervention

Google on Saturday restored all Indian apps it had removed.

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Google has started to restore all the delisted Indian mobile apps on Play Store agian, which they had removed due to a disagreement over service fees. After a discussion between company representatives and IT Minister Ashwini Vaishnaw, the decision was made, according to sources.

The step was taken in response to Vaishnaw’s strong statement in which he said that it is not allowed for apps to be removed from the Google Play Store. The minister had said, India is very clear, our policy is very clear…our startups will get the protection that they need.

Vaishnaw  continued saying that he has already given Google a call. They will be speaking with the app developers who were delisted this week. This is not acceptable. The minister said this kind of delisting cannot be permitted.

Ten Indian companies’ apps were banned by Google on Friday, causing outrage in one of its fastest-growing markets. With 94% of phones running on its Android platform, Google holds a large portion of the Indian market. Popular names like Naukri and Bharatmatrimony were on the list.

The main point of contention is Google’s in-app purchase fees, which range from 11% to 26%. Indian startups have long opposed the US tech giant’s actions, believing them to be unfair.

The founder of Bharat Matrimony, Christian Matrimony, Muslim Matrimony, and Jodii, Matrimony.com, expressed shock at the matchmaking apps’ removal from the Google Play Store.

Shaadi. Com CEO Anupam Mittal described it as a dark day for India’s internet, highlighting the possible broad effects on matchmaking services. He also called Google an evil.

While, Kuku FM Co-founder Vinod Kumar Meena in a statement had said that Google was behaving like a monopoly.

Meanwhile, Google temporarily withdrew the famous Indian payments app Paytm from the Play Store in 2020, claiming a few policy infractions. Due to this decision, the founder of the company as well as the larger startup community came together to build their own app stores and file lawsuits against Google.

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Anant Ambani says he is 100% lucky to get Radhika Merchant in his life

Anant Ambani said he was grateful to get Radhika as his life partner. He said he is 100% lucky to get Radhika Merchant in his life. He said every day he is falling more and more in love with her. He added although he had known Radhika for the last 7 years, it felt he had met her only yesterday. He thanked Radhika for everything.

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Anant Ambani and Radhika Merchant’s grand three-day wedding celebrations began with a glamorous cocktail night on Friday in Jamnagar. During the celebrations, Anant Ambani also gave a speech wherein he thanked his late grandfather Dhirubhai Ambani and grandmother Kokilaben Ambani for inspiring him. Anant Ambani said he was grateful to get Radhika as his life partner. He said he is 100% lucky to get Radhika Merchant in his life. He said every day he is falling more and more in love with her.

He expressed his gratitude to his mother for pulling together the lavish three-day wedding celebrations in Jamnagar. Anant thanked his mother for all she had done. He said all the arrangements had been done by his mother and nobody else. He added his mother had gone all out and she had worked 18-19 hours a day and he was extremely grateful to her.

He also thanked all the guests who were present there at the pre-wedding celebrations. He said everyone had made it to Jamnagar to make him and Radhika feel special. He said both of them were honored and humbled to have all of them present there. Anant said he was sorry if they had caused an inconvenience to anyone. He asked for forgiveness. He hoped everyone is going to enjoy the coming three days. He also thanked his mother, father, sister, brother, his sister-law and his brother in-law for making this event memorable.

Anant said everyone has been sleeping for less than 3 hours a day for the last 2-3 months and he was very happy to share this joy with everyone. The youngest Ambani talked about his personal struggles and how his parents had always supported him. He further added his life had not been entirely a bed of roses. He said he had also experienced the pain of thorns. He said he had faced many health crises.

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