INSUBCONTINENT EXCLUSIVE:
The ongoing rift with the government is set to play out at the RBI's crucial board meeting Monday, with the Finance Ministry nominees and
some independent directors expected to take on Governor Urjit Patel and his team over issues ranging from MSME credit to the central bank's
Governor to step down, sources said Patel is unlikely to yield under pressure and will rather mount a strong defence of the central bank's
who all are members of the RBI's 18-member central board, will present a united front, while a few independent directors too are expected to
meeting, with the chair's permission
Patel and his four deputies as 'full-time official directors', while the rest 13 have been nominated by the government, including two
of India (RBI) are looking to reach at an agreeable solution with respect to relaxation of the Prompt Corrective Action (PCA) framework and
These are 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 PCA framework kicks in when banks breach any of the three key regulatory trigger points -- namely capital to risk weighted assets ratio,
net non-performing assets (NPA) and return on assets (RoA).Globally, PCA kicks in only when banks slip on a single parameter of capital
expected to consider a special dispensation for micro, small and medium enterprises (MSMEs) and non-banking financial companies (NBFCs)
which have been facing liquidity issues
The government feels that the MSME sector -- which employs about 12 crore people and plays a critical role in the economy -- needs some
due to the cleaning up of the banking system from the "collectively committed sins" during 2008-14 when the regulatory mechanisms also
Governor Viral Acharya had in a speech last month talked about the independence of the central bank, arguing that any compromise could be
"potentially catastrophic" for the economy
In his first public comments since the spat between the RBI and the Finance Ministry came out in the open, Swadeshi ideologue S Gurumurthy
had last week said the stand-off "is not a happy thing at all".Gurumurthy, who was appointed to the board of RBI a few months back, had said
the capital adequacy ratio prescribed in India is 1 per cent higher than the global Basel norms
He also pitched for easing lending norms for small and medium enterprises, which account for 50 per cent of the country's GDP
