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Parliament panel to quiz RBI governor Urjit Patel on rift with govt

RBI governor Urjit Patel is scheduled to appear before the committee for third time to argue his case on the issue of demonetisation

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The ongoing tussle between the central government and Reserve Bank of India (RBI) on the latter's autonomy will come up for discussion at the upcoming Parliamentary Standing Committee on Finance headed by former minister Veerappa Moily slated for November 12.

RBI governor Urjit Patel is scheduled to appear before the committee for the third time to argue his case on the issue of demonetisation. The governor is also scheduled to brief the committee on the banning of the Unregulated Deposit Schemes Bill. The ensuing meeting is ahead of the winter session of the parliament and may be the last one before the next general elections.

The committee member from the ruling Bharatiya Janta party-led NDA government told DNA Money, ''The members will take an opportunity to seek RBI governor's views on the burgeoning rift between RBI and the government over issues relating to public sector bank regulation, resolution of distressed assets and the central bank's reserves. He said the committee would like to know the governor's views on the extensive consultation between the government and RBI, and on the government's stand that it respects and nurtures the autonomy of the central bank, which has to be guided by public interest.

A committee member belonging to an Opposition party said the rift between the government and RBI will be discussed at the meeting.

''The tussle between the government and RBI came to light in the wake of the IL&FS crisis, in which the shadow lender defaulted on its debt payments. RBI is believed to have clarified that there is no liquidity crunch and no sign of stress in non-banking finance companies,'' he said.

Another member said the committee in its report submitted in August to the parliament had suggested that RBI as regulator should consider separate treatment of NPAs due to wilful defaulters and those where defaults are because of extraneous reasons such as cancellation of coal blocks, policy interventions by the judiciary and general policy changes in various sectors such as coal, power, steel, telecom and roads. For this purpose, the committee had said the concerned RBI guidelines and circulars should be reviewed.

TAKING STOCK

RBI governor Urjit Patel is scheduled to appear before the committee for third time to argue his case on the issue of demonetisation

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