MUMBAI: The RBI board held a marathon meeting Monday amid a rift between the central bank and the Government over several issues including how much capital the apex bank needs, lending norms for small and medium enterprises and rules for weak banks.
RBI Governor Urjit Patel and his deputies came face to face with Government nominee directors — Economic Affairs Secretary Subhash Chandra Garg and Financial Services Secretary Rajiv Kumar — and independent members like S Gurumurthy to arrive at a middle ground on some of the contentious issues.
While there was no official word on the deliberations at the meeting that lasted nearly nine hours, the Government and Gurumurthy have been pressing the central bank to provide more liquidity to non-banking finance companies (NBFCs), ease lending rules to small businesses, relax norms for weak banks and part with more of RBI’s surplus reserves to boost the economy.
There are indications that the RBI may be willing to ease lending norms for micro, small and medium enterprises (MSMEs) but liquidity to NBFCs remains a sticking point. It may also be open to injecting liquidity through open market purchases of bonds but is resisting relaxing capital buffers for banks. (AGENCIES)
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