INSUBCONTINENT EXCLUSIVE:
Scheduled for December 14, the RBI's board is unlikely to meet without a governor at the helm.The exit of Urjit Patel as governor of the
Reserve Bank of India (RBI) was the culmination of months of simmering tensions between the government and the central bank.In a way, it
gives the government the opportunity to do what it wants: name a new governor who is more willing to do its bidding; extract more capital
from the central bank to plug its budget deficit; and loosen lending curbs on some of the weakest banks
As everyone awaits the appointment of the next chief, here's a look at what could be in store in coming days:Board MeetingScheduled for
A great deal is riding on that meeting since government-nominated members on the board had pushed to discuss tighter supervision of the RBI,
and to set up committees to have oversight of various central bank's functions, from foreign exchange management to financial stability
Economic Secretary Subhash Chandra Garg, who is on the board, said last month he wanted to discuss changes to the central bank's governance
structure and seek more interim dividends from the RBI
The central bank had viewed the pressure from government officials as an attack on its independence.Another ResignationViral Acharya, the
deputy governor in charge of monetary policy, was Patel's messenger in the public showdown with the government
He gave a hard-hitting speech in late October, warning governments of a market backlash if central bank independence is undermined
Acharya's opposition to the government's interference in the RBI's role has led to speculation that he may be next in line to resign
A professor at New York University, Acharya's three-year term as deputy governor ends in January 2020.Interim GovernorPrime Minister
Narendra Modi will have to appoint an interim governor, as has been the practice in the past, with that post likely to go to N
Vishwanathan, currently the longest-serving of the four deputies at the central bank
An interim appointee could be at the helm for several months before a permanent successor is named
There's no obvious candidate, but local media are floating names of several people, including Garg, and the top bureaucrat in the financial
services division at the Finance Ministry, Rajiv Kumar, both of whom are RBI board members
Shaktikanta Das, a former economic affairs secretary and currently the government's representative at the Group of 20 summits, is also in
the race, according to local reports.Monetary PolicyA new governor, especially a bureaucrat, could turn out to be less hawkish than Patel,
who headed the six-member monetary policy committee
In last week's policy meeting, the MPC left interest rates unchanged but opted to stick to a tight stance despite inflation undershooting
The RBI has also been reluctant to provide more liquidity to the banking system to support shadow lenders and some weak state-run banks, a
key reason for the tension between the central bank and the government
Modi's administration wants the liquidity taps to be opened more generously so that banks can lend to small businesses ahead of a general
election early next year.Reserves and BanksThe new governor will have to grapple with pressure from the government to transfer more of its
excess capital to the state, another key area of contention
Finance Ministry officials estimated the RBI has at least 3.6 lakh crore rupees more capital than it needs, which they say the central bank
can use to help bolster weak state banks
At last month's marathon board meeting, a decision was reached to appoint a committee to study the central bank's capital framework
The new governor will also need to decide whether to remove lending restrictions on some state-run banks and deal with a liquidity crisis in
the shadow banking sector.For the latest News Live Updates on Election Results from each assembly constituency in Madhya Pradesh,
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