The Reserve Bank of India will form a panel to study the transfer of surplus funds to the government, according to board member Sachin Chaturvedi.
The central bank's board meeting went off “very well”. Both the governor and finance ministry walked the extra mile and were flexible on several issues, Chaturvedi, a member of the board who attended Monday's meeting, told Bloomberg News in a phone interview.
It was a comprehensive meeting discussed in a congenial atmosphere. Both RBI and finance ministry's concern was the economy's well being.Sachin Chaturvedi, Board Member, RBI
The board will meet next on Dec. 14, he added.
The RBI will take measures to ease liquidity for the financial sector, Reuters reported citing an unidentified person familiar with the matter.
A decision on improving credit flow to micro and small and medium enterprises is also expected, an official aware of the developments told BloombergQuint on the condition of anonymity.
The decisions were taken in a meeting of the 18-member board, which includes central bankers, government officials and industrialists, that lasted a little over nine hours.
Detailed presentations were made on various issues and the board members shared inputs, the official cited above added. The Department of Economic Affairs Secretary made a presentation on the contentious economic capital framework of the RBI, the official said.
RBI will issue a statement on the meeting of the board, a central bank official told BloombergQuint.
Points Of Friction
The central board of the Reserve Bank of India met amid a public battle over a host of issues ranging from banking regulation to the central bank's own balance sheet.
The issues, which were presumably brewing behind closed doors, came out into the open when RBI Deputy Governor Viral Acharya highlighted them in a speech focused on central bank independence.
The points of friction included:
- The central bank's balance sheet
- Easing Prompt Corrective Action framework
- Diluting Basel norms and stressed asset framework for Indian banks
- Tackling NBFC, SME concerns
This is a developing story.
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