RBI to soon lift ban on transactions in Manipur

The Reserve Bank of India (RBI) has agreed to lift its recent ban on transactions by the Manipur government that had put the state into financial turmoil, Chief Minister N Biren Singh said on Thursday.

The RBI had banned all transactions by Manipur government from June 1 due to withdrawal money from banks more than its permissible limit.

The ban had also triggered a political crisis as Singh had taken over the finance ministry from Deputy Chief Minister Joykumar Singh, following reports that a large sum of money was withdrawn when the code of conduct for Lok Sabha elections was in force.

The state cabinet has formed a committee to look into the suspected anomalies in the transactions.

The deputy chief minister is an MLA of NPP, an ally of the BJP-led government in Manipur.

Singh’s decision triggered a political crisis, with a group of MLAs rushing to New Delhi with a request to replace the chief minister.

A statement issued by the chief minister’s office on Thursday said the RBI’s assurance of lifting the ban came after he met Prime Minister Narendra Modi and Union Finance Minister Nirmala Sitharaman in New Delhi and briefed them about the state’s current financial position.

“Following Singh’s request, the finance ministry issued permission, directing the RBI to raise open market borrowings of the state from Rs. 400 crore at present to Rs. 795 crores. The state government is also expecting another Rs. 305 crores as the state share of Central Taxes in a day or so,” said the statement.

The Centre also approved projects worth Rs. 176.43 crores from the Ministry of Development of North Eastern Region (DoNER) for Manipur, it said.

The state government had decided to stop all new appointments due to the financial constraints faced by the state government. It said the development of the state was affected due to the shortage of funds.