JOIN USRBI board delays changes in governance norms
The Reserve Bank, in its central board meeting on Friday, bought more time to look into the governance changes within the central bank.
“The Board deliberated on the Governance Framework of the Reserve Bank and it was decided that the matter required further examination,” the RBI said in a statement post board meeting.
In the earlier November 19 meeting, the central government nominees on the RBI board — Financial Services Secretary Rajiv Kumar and Economic Affairs Secretary S C Garg — had pushed a proposal to consider governance reforms in RBI, driven from the idea that government has more say in apex bank’s functioning.
The board has also discussed the issues regarding the liquidity and credit delivery to the economy.
As per the highly placed sources, according to the resolution reached the crucial board meeting, the RBI governor Shaktikanta Das is expected to meet government officials shortly to address the contentious issues of liquidity in the markets and the credit supply in the economy.
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The board is expected to again review the situation of liquidity in India’s shadow banking sector in January, sources said.
The shadow banking sector has been reeling under liquidity crunch, post IL&FS defaulted on a whopping debt of Rs 90,000 crore.
According to the sources within the RBI, the central board also discussed issues regarding the prompt corrective action, however, no consensus was reached.
Out of the 21 state-owned banks, 11 are under the PCA framework, which imposes lending and other restrictions on weak banks.
The banks under PCA include Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, UCO Bank, Bank of India, Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce, Dena Bank and Bank of Maharashtra.
The board is also said to have considered if a capital infusion is required for banks coming under PCA and the provisioning required for Q4 of this fiscal.
The Board for Financial Supervision (BSF) panel will give more details on PCA norm review in the next RBI board meeting, sources added.