New RBI Governor Shaktikanta Das said Wednesday that he would protect the autonomy of the country's central bank.&nbsp;

Das was appointed RBI &nbsp;governor on Tuesday after <a href="http://www.wionews.com/india-news/rbi-governor-urjit-patel-resigns-cites-personal-reasons-182915">former governor Urjit Patel's sudden resignation on Monday</a>. Patel and the government had been tussling for months over the issue of the bank's independence.&nbsp;

The main points of contention between them had been the bank's surplus cash reserves. The government was of the opinion that more of them should be handed over to the government.&nbsp;

The government was also keen that the central bank free up credit — by loosening its curbs on the non-banking financial sector — for small and medium enterprises.&nbsp;

"I will try and uphold professionalism, core values, credibility and autonomy of this institution. It’s an honour and great opportunity to serve RBI. I will try my best to work with everyone and work in the interest of Indian economy," Das said on Wednesday.&nbsp;

"I have convened a meeting with CEOs and MDs of public sector banks tomorrow morning. Banking is an important segment in our economy and it’s facing several challenges that need to be dealt with. It's the banking sector on which I’d like to focus immediately," he added.&nbsp;

Das was on Wednesday asked, he made his comments at a press conference, about the strife between his predecessor and the government.&nbsp;

"I don't know if the relationship is good or not but we have to have stakeholders'&nbsp;consultation," Das answered.

"Government is not just a stakeholder but also runs the country, economy and manages major policy decisions. So there has to be discussion between government and RBI," he added.&nbsp;

Das is a former top&nbsp;bureaucrat. He retired from the government as Secretary of the Economic Affairs Department. He has also been a secretary of the Revenue Department.&nbsp;

Das was also <a href="http://www.wionews.com/india-news/new-rbi-governor-shaktikanta-dass-journey-from-north-block-to-mint-street-183339">the Modi government's point man during demonetisation</a>, briefing the media on changes in rules — there had been several&nbsp;— after the government junked the old 500 and 1,000-rupee notes.&nbsp;

One of his ideas had been to mark people's fingers with indelible ink — like is done during elections — after they had withdrawn cash from their bank accounts, so as to stop them from withdrawing more cash than the allowed limit.&nbsp;

The move was withdrawn after widespread outrage.&nbsp;&nbsp;

Das has MA in history from Delhi's St Stephen's College.&nbsp;

New RBI Governor Shaktikanta Das said Wednesday that he would protect the autonomy of the country's central bank. Das was appointed RBI governor on Tuesday after former governor Urjit Patel's sudden resignation on Monday.

New RBI Governor Shaktikanta Das said Wednesday that he would protect the autonomy of the country's central bank. Das was appointed RBI governor on Tuesday after former governor Urjit Patel's sudden resignation on Monday. Patel and the government had been tussling for months over the issue of the bank's independence. The main points of contention between them had been the bank's surplus cash reserves. The government was of the opinion that more of them should be handed over to the government. The government was also keen that the central bank free up credit — by loosening its curbs on the non-banking financial sector — for small and medium enterprises. "I will try and uphold professionalism, core values, credibility and autonomy of this institution. It’s an honour and great opportunity to serve RBI. I will try my best to work with everyone and work in the interest of Indian economy," Das said on Wednesday. "I have convened a meeting with CEOs and MDs of public sector banks tomorrow morning. Banking is an important segment in our economy and it’s facing several challenges that need to be dealt with. It's the banking sector on which I’d like to focus immediately," he added. Das was on Wednesday asked, he made his comments at a press conference, about the strife between his predecessor and the government. "I don't know if the relationship is good or not but we have to have stakeholders' consultation," Das answered. "Government is not just a stakeholder but also runs the country, economy and manages major policy decisions. So there has to be discussion between government and RBI," he added. Das is a former top bureaucrat. He retired from the government as Secretary of the Economic Affairs Department. He has also been a secretary of the Revenue Department. Das was also the Modi government's point man during demonetisation, briefing the media on changes in rules — there had been several — after the government junked the old 500 and 1,000-rupee notes. One of his ideas had been to mark people's fingers with indelible ink — like is done during elections — after they had withdrawn cash from their bank accounts, so as to stop them from withdrawing more cash than the allowed limit. The move was withdrawn after widespread outrage. Das has MA in history from Delhi's St Stephen's College.

Will protect RBI's autonomy: New Governor Shaktikanta Das

Social media users question RBI governor Shaktikanta Das's qualification

'Will work in best interest of economy': RBI governor Shaktikanta Das

BJP lawmaker Subramanian Swamy here on Wednesday said that the appointment of Shaktikanta Das as the new Governor of the Reserve Bank of India (RBI) is wrong.&nbsp;

Swamy alleged that Das was involved in corrupt activities with former Finance Minister and Congress leader P Chidambaram and even tried to save him in the court cases.&nbsp;

"I don`t know why this was done. I have written a letter to Prime Minister Narendra Modi against this decision," Swamy said.

Shaktikanta Das, a member of the 15th Finance Commission and former Economic Affairs Secretary, was on Tuesday appointed as RBI Governor, a day after Urjit Patel quit abruptly. Das retired as Economic Affairs secretary last year and was subsequently made a member of the 15th Finance Commission.&nbsp;

 
&nbsp;

BJP lawmaker Subramanian Swamy here on Wednesday said that the appointment of Shaktikanta Das as the new Governor of the Reserve Bank of India (RBI) is wrong. Swamy alleged that Das was involved in corrupt activities with former Finance Minister and Congress leader P Chidambaram and even tried to save him in the court cases.

BJP lawmaker Subramanian Swamy here on Wednesday said that the appointment of Shaktikanta Das as the new Governor of the Reserve Bank of India (RBI) is wrong. Swamy alleged that Das was involved in corrupt activities with former Finance Minister and Congress leader P Chidambaram and even tried to save him in the court cases. "I don`t know why this was done. I have written a letter to Prime Minister Narendra Modi against this decision," Swamy said. Shaktikanta Das, a member of the 15th Finance Commission and former Economic Affairs Secretary, was on Tuesday appointed as RBI Governor, a day after Urjit Patel quit abruptly. Das retired as Economic Affairs secretary last year and was subsequently made a member of the 15th Finance Commission.

Appointment of Shaktikanta Das as RBI Governor is wrong: Subramanian Swamy

A day after Urjit Patel resigned as RBI Governor, Niti Aayog Vice Chairman Rajiv Kumar said the central bank's institutional capabilities are 'very strong' and it will do whatever is required for the markets and economy.

Kumar further said although Patel has done an amazing work in the last two years as RBI Governor, the functioning of the central bank is not dependent on any particular individual.

"RBI's institutional capabilities are very strong and they will do whatever is required for the markets and economy. The fact is that RBI itself is such a professional institution, and such a long-standing institution that you know, the business will continue," Kumar said in New Delhi on Tuesday.

Patel, who had a run-in with the government over autonomy of the central bank, resigned as RBI governor on Monday, citing personal reasons.

The Niti Aayog vice chairman also assured that the government will do whatever is required to continue its business as usual.

"Patel has done an amazing work in the last two years...But RBI is not dependent on any one particular individual," Kumar said.

Commenting of weakening of the rupee after Patel's resignation, Kumar said: "The government also, I am sure, is seized of the matter and will take care whichever way it's possible."

The rupee on Tuesday plunged by a significant 110 paise in early trade as domestic equities saw heavy sell-off amid crucial state election results and the unexpected resignation of Reserve Bank Governor Urjit Patel.

A day after Urjit Patel resigned as RBI Governor, Niti Aayog Vice Chairman Rajiv Kumar said the central bank's institutional capabilities are 'very strong' and it will do whatever is required for the markets and economy.

A day after Urjit Patel resigned as RBI Governor, Niti Aayog Vice Chairman Rajiv Kumar said the central bank's institutional capabilities are 'very strong' and it will do whatever is required for the markets and economy. Kumar further said although Patel has done an amazing work in the last two years as RBI Governor, the functioning of the central bank is not dependent on any particular individual. "RBI's institutional capabilities are very strong and they will do whatever is required for the markets and economy. The fact is that RBI itself is such a professional institution, and such a long-standing institution that you know, the business will continue," Kumar said in New Delhi on Tuesday. Patel, who had a run-in with the government over autonomy of the central bank, resigned as RBI governor on Monday, citing personal reasons. The Niti Aayog vice chairman also assured that the government will do whatever is required to continue its business as usual. "Patel has done an amazing work in the last two years...But RBI is not dependent on any one particular individual," Kumar said. Commenting of weakening of the rupee after Patel's resignation, Kumar said: "The government also, I am sure, is seized of the matter and will take care whichever way it's possible." The rupee on Tuesday plunged by a significant 110 paise in early trade as domestic equities saw heavy sell-off amid crucial state election results and the unexpected resignation of Reserve Bank Governor Urjit Patel.

RBI's institutional capabilities very strong: Niti Aayog's Rajiv Kumar on Urjit Patel's exit

Finance Minister Arun Jaitley on Tuesday said the <a href="http://www.wionews.com/business-economy/shaktikanta-das-appointed-new-rbi-governor-after-urjit-patels-exit-183297">new RBI Governor Shaktikanta Das</a> has the right credentials to hold the post and expressed confidence that he will be meet the challenges facing the nation.&nbsp;

He asserted that the independence and autonomy of the RBI will be maintained, saying it is in the interest of the government. Das, a member of the 15th Finance Commission and former Economic Affairs Secretary, was appointed as RBI Governor, a day after Urjit Patel quit abruptly.&nbsp;

Das, an IAS officer from the Tamil Nadu cadre, will have a tenure of three years, according to a decision taken by the Appointments Committee of the Cabinet (ACC).&nbsp;

"The vacancy arose after Urjit Patel resigned and we accepted his resignation today," Jaitley said.&nbsp;

Talking about Das, the finance minister said, "I think he has the right credentials, he has been extremely professional. He has worked under various governments, has excelled himself and I am sure in meeting the challenges before India`s economy as a Governor of RBI. He`ll certainly add to that office."&nbsp;

To a question, he said that the government of India believes the RBI is an independent body and the government will support RBI and coordinate with it whenever required.&nbsp;

"It is interest of the government to maintain independence and autonomy of the RBI and the government is committed to this effect," said Jaitley.&nbsp;

Praising Das, he said, "Besides his experience as the Revenue Secretary, Economic Affairs Secretary, he also had the experience in preparing several budgets as joint secretary, in charge of budget division. Subsequently he has been a G20 Sherpa on behalf of India. He`s been a member of 15th Finance Commission," he added.&nbsp;

 
&nbsp;

Finance Minister Arun Jaitley on Tuesday said the new RBI Governor Shaktikanta Das has the right credentials to hold the post and expressed confidence that he will be meet the challenges facing the nation.

Finance Minister Arun Jaitley on Tuesday said the new RBI Governor Shaktikanta Das has the right credentials to hold the post and expressed confidence that he will be meet the challenges facing the nation. He asserted that the independence and autonomy of the RBI will be maintained, saying it is in the interest of the government. Das, a member of the 15th Finance Commission and former Economic Affairs Secretary, was appointed as RBI Governor, a day after Urjit Patel quit abruptly. Das, an IAS officer from the Tamil Nadu cadre, will have a tenure of three years, according to a decision taken by the Appointments Committee of the Cabinet (ACC). "The vacancy arose after Urjit Patel resigned and we accepted his resignation today," Jaitley said. Talking about Das, the finance minister said, "I think he has the right credentials, he has been extremely professional. He has worked under various governments, has excelled himself and I am sure in meeting the challenges before India`s economy as a Governor of RBI. He`ll certainly add to that office." To a question, he said that the government of India believes the RBI is an independent body and the government will support RBI and coordinate with it whenever required. "It is interest of the government to maintain independence and autonomy of the RBI and the government is committed to this effect," said Jaitley. Praising Das, he said, "Besides his experience as the Revenue Secretary, Economic Affairs Secretary, he also had the experience in preparing several budgets as joint secretary, in charge of budget division. Subsequently he has been a G20 Sherpa on behalf of India. He`s been a member of 15th Finance Commission," he added.

Jaitley confident new RBI governor Shaktikanta Das will meet challenges on economic front

For a career bureaucrat who was equally at ease with three different finance ministers, the journey from North Block to Mint Street has often seen him adopting a non-confrontational approach and building consensus on tackling tricky issues.

Considered an efficient implementer and a team player, <a href="http://www.wionews.com/business-economy/shaktikanta-das-appointed-new-rbi-governor-after-urjit-patels-exit-183297">Shaktikanta Das</a> may be the right man in the Reserve Bank of India (RBI) that has seen a governor quit for the first time in almost three decades amid tensions with the finance ministry over governance and autonomy issues.

Das, a 1980 batch IAS officer of the Tamil Nadu cadre, is a post graduate in history from the Delhi University but had mostly worked in economic and finance departments in the state and the centre during his 37-year-long tenure.

The man, who fielded questions on the day the Modi government made the shock announcement of junking overnight 86 per cent of the currency in circulation, first came to the finance ministry as a joint secretary in 2008 when P Chidambaram was the finance minister.

He stayed on as the reins were taken over by Pranab Mukherjee and was part of budget making for five consecutive years first as a joint secretary and then as an additional secretary. This spanned over tenures of Mukherjee and Chidambaram.&nbsp;

Das was promoted as Secretary, Department of Chemicals and Fertilizers in December 2013 but was brought back to the finance ministry as revenue secretary when the BJP-led government stormed to power in mid-2014.

He first played a part in the Modi government's crackdown on black money and then building a consensus for the impending rollout of the Goods and Services Tax (GST).

Moved to the economic affairs department in September 2015, he was in-charge when the government on November 8, 2016, withdrew from circulation old 500 and 1,000 rupee notes.

From defending the shock announcement to spearheading the demonetisation drive that included the cumbersome process of printing and supplying new 500 and 2,000 rupees notes, his calm composure brought a sense of serenity to an otherwise chaotic situation.

Mild-mannered, Das is known to rarely lose his cool and focus mostly on looking at solutions through consensus rather than shoving a solution down -- qualities that will come handy at the RBI which is having an unprecedented face-off with the finance ministry.

For last few weeks, the RBI has been at loggerheads with the finance ministry on matters ranging from the appropriate size of the reserves the central bank must hold to the easing of lending norms for sectors such as small and medium enterprises.

Besides, there are differences on governance issue as to what should be the level of involvement of central board on various important decision.&nbsp;&nbsp; &nbsp;&nbsp;

The role is well charted before the new Governor Das, who has served on the board of the RBI as a government nominee director for nearly two years as Economic Affairs Secretary till May 2017.

Soon after superannuation, the government appointed Das as G-20 Sherpa of India and a member of the 15th Finance Commission, an MoS rank position in the Government of India.&nbsp;&nbsp; &nbsp;

Das will be the 25th Governor of the RBI. The rare blip on his otherwise illustrious career came in June 2016 when BJP's Subramanian Swamy took a veiled dig that a case pending against Das for allegedly helping Chidambaram "swallow" real estate in Mahabalipuram.

The attack was over a period when he was industry secretary in the Tamil Nadu government.&nbsp;

Naturally, Jaitley came out in full defence of his trusted bureaucrat saying he fully backed him and "an unfair and false attack on a disciplined civil servant" was being made.&nbsp;

For a career bureaucrat who was equally at ease with three different finance ministers, the journey from North Block to Mint Street has often seen him adopting a non-confrontational approach and building consensus on tackling tricky issues.

For a career bureaucrat who was equally at ease with three different finance ministers, the journey from North Block to Mint Street has often seen him adopting a non-confrontational approach and building consensus on tackling tricky issues. Considered an efficient implementer and a team player, Shaktikanta Das may be the right man in the Reserve Bank of India (RBI) that has seen a governor quit for the first time in almost three decades amid tensions with the finance ministry over governance and autonomy issues. Das, a 1980 batch IAS officer of the Tamil Nadu cadre, is a post graduate in history from the Delhi University but had mostly worked in economic and finance departments in the state and the centre during his 37-year-long tenure. The man, who fielded questions on the day the Modi government made the shock announcement of junking overnight 86 per cent of the currency in circulation, first came to the finance ministry as a joint secretary in 2008 when P Chidambaram was the finance minister. He stayed on as the reins were taken over by Pranab Mukherjee and was part of budget making for five consecutive years first as a joint secretary and then as an additional secretary. This spanned over tenures of Mukherjee and Chidambaram. Das was promoted as Secretary, Department of Chemicals and Fertilizers in December 2013 but was brought back to the finance ministry as revenue secretary when the BJP-led government stormed to power in mid-2014. He first played a part in the Modi government's crackdown on black money and then building a consensus for the impending rollout of the Goods and Services Tax (GST). Moved to the economic affairs department in September 2015, he was in-charge when the government on November 8, 2016, withdrew from circulation old 500 and 1,000 rupee notes. From defending the shock announcement to spearheading the demonetisation drive that included the cumbersome process of printing and supplying new 500 and 2,000 rupees notes, his calm composure brought a sense of serenity to an otherwise chaotic situation. Mild-mannered, Das is known to rarely lose his cool and focus mostly on looking at solutions through consensus rather than shoving a solution down -- qualities that will come handy at the RBI which is having an unprecedented face-off with the finance ministry. For last few weeks, the RBI has been at loggerheads with the finance ministry on matters ranging from the appropriate size of the reserves the central bank must hold to the easing of lending norms for sectors such as small and medium enterprises. Besides, there are differences on governance issue as to what should be the level of involvement of central board on various important decision. The role is well charted before the new Governor Das, who has served on the board of the RBI as a government nominee director for nearly two years as Economic Affairs Secretary till May 2017. Soon after superannuation, the government appointed Das as G-20 Sherpa of India and a member of the 15th Finance Commission, an MoS rank position in the Government of India. Das will be the 25th Governor of the RBI. The rare blip on his otherwise illustrious career came in June 2016 when BJP's Subramanian Swamy took a veiled dig that a case pending against Das for allegedly helping Chidambaram "swallow" real estate in Mahabalipuram. The attack was over a period when he was industry secretary in the Tamil Nadu government. Naturally, Jaitley came out in full defence of his trusted bureaucrat saying he fully backed him and "an unfair and false attack on a disciplined civil servant" was being made.

New RBI Governor Shaktikanta Das's journey from North Block to Mint Street 

The government on Tuesday appointed former finance secretary Shaktikanta Das as the new governor of Reserve Bank of India. He will have a three-year tenure.

Urjit Patel's shock resignation from the post on Monday following a policy tussle with the government had sent tremors through financial markets, and investors were keen to see the government quickly name a credible replacement.

Das, 61, is currently a member of the the finance commission, and one of India's serving G20 representatives. He was widely perceived to be a contender for the top job at the RBI after the exit of former governor Raghuram Rajan in 2016.

He previously served on the central bank's board. Das came under fire for his pro-demonetisation stance and he was the most visible and vocal bureaucrat at the time Modi withdrew the high-value bank notes in 2016.

Last year, Das criticised the methodology of global rating agencies and sought a sovereign rating upgrade. Das has worked extensively in the budget division under both Modi government and the previous coalition led by the Congress.

(With inputs from agencies)

The government on Tuesday appointed former finance secretary Shaktikanta Das as the new governor of Reserve Bank of India. He will have a three-year tenure. Urjit Patel's shock resignation from the post on Monday following a policy tussle with the government had sent tremors through financial markets, and investors were keen to see the government quickly name a credible replacement.

The government on Tuesday appointed former finance secretary Shaktikanta Das as the new governor of Reserve Bank of India. He will have a three-year tenure. Urjit Patel's shock resignation from the post on Monday following a policy tussle with the government had sent tremors through financial markets, and investors were keen to see the government quickly name a credible replacement. Das, 61, is currently a member of the the finance commission, and one of India's serving G20 representatives. He was widely perceived to be a contender for the top job at the RBI after the exit of former governor Raghuram Rajan in 2016. He previously served on the central bank's board. Das came under fire for his pro-demonetisation stance and he was the most visible and vocal bureaucrat at the time Modi withdrew the high-value bank notes in 2016. Last year, Das criticised the methodology of global rating agencies and sought a sovereign rating upgrade. Das has worked extensively in the budget division under both Modi government and the previous coalition led by the Congress. (With inputs from agencies)

Shaktikanta Das appointed new RBI governor after Urjit Patel's exit

RBI Governor <a href="http://www.wionews.com/india-news/rbi-governor-urjit-patel-may-consider-resigning-after-rift-with-government-report-174513">Urjit Patel has resigned</a>,&nbsp;saying he was doing so for "personal reasons".&nbsp;

"On account of personal reasons, I have decided to step down from my current position (RBI Governor) effective immediately. It has been my privilege and honour to serve in the Reserve Bank of India in various capacities over the years," Patel said in a statement.&nbsp;

"Support and hard work of RBI staff, officers and management has been proximate driver of Bank’s considerable accomplishments in recent years. I take this opportunity to express gratitude to my colleagues and directors of RBI Central Board and wish them all the best for future," he added.&nbsp;

Pointedly, he made no mention of the finance ministry or the government with which he had been tussling with of late over the issue of the bank's reserve funds.

The government was of the opinion that the bank should hand over a larger share of them to the government.&nbsp;

The government was also keen that the central bank free up credit — by loosening its curbs on the non-banking financial sector — for small and medium enterprises.&nbsp;

The government had wanted to kick-start growth. (A general election is to be held before May next year.)

Patel is the first RBI governor to step down before completing his term since 1990.&nbsp;&nbsp;

The larger battle between the government and Patel had devolved down to one of autonomy. RBI Deputy Governor Viral Acharya had recently warned that any government that does not respect the central bank's financial autonomy <a href="http://www.wionews.com/india-news/a-govt-that-does-not-respect-rbis-independence-will-incur-wrath-of-markets-rbi-deputy-governor-173752">will have to face the wrath of the markets</a>.&nbsp;

The government however&nbsp;reportedly invoked Section 7 of the RBI act which allows it to issue directions to the central bank. The section has never before been invoked in independent India.&nbsp;

"We will miss him immensely," Prime Minister Narendra Modi said in a pair of tweeets after Patel announced his departure.&nbsp;

<div class="ui-state-default" contenteditable="false">
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<blockquote class="twitter-tweet" data-lang="en">
Dr Urjit Patel is an economist of a very high calibre with a deep and insightful understanding of macro-economic issues. He steered the banking system from chaos to order and ensured discipline. Under his leadership, the RBI brought financial stability.
— Narendra Modi (@narendramodi) <a href="https://twitter.com/narendramodi/status/1072104938908508161?ref_src=twsrc%5Etfw">December 10, 2018</a></blockquote>
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<blockquote class="twitter-tweet" data-lang="en">
Dr. Urjit Patel is a thorough professional with impeccable integrity. He has been in the Reserve Bank of India for about 6 years as Deputy Governor and Governor. He leaves behind a great legacy. We will miss him immensely.
— Narendra Modi (@narendramodi) <a href="https://twitter.com/narendramodi/status/1072105285303492614?ref_src=twsrc%5Etfw">December 10, 2018</a></blockquote>
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"He steered the banking system from chaos to order and ensured discipline. Under his leadership, the RBI brought financial stability," Modi added.&nbsp;

Finance Minister Arun Jaitley also put out a pair of tweets, saying "It was a pleasure for me to deal with him and benefit from his scholarship."&nbsp;

<div class="ui-state-default" contenteditable="false">
<div class="twitter-block" draggable="false">
<blockquote class="twitter-tweet" data-lang="en">
The Government acknowledges with deep sense of appreciation the services rendered by Dr. Urjit Patel to this country both in his capacity as the Governor and the Deputy Governor of The RBI. It was a pleasure for me to deal with him and benefit from his scholarship. (1/2)
— Arun Jaitley (@arunjaitley) <a href="https://twitter.com/arunjaitley/status/1072103484642783233?ref_src=twsrc%5Etfw">December 10, 2018</a></blockquote>
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<div class="ui-state-default" contenteditable="false">
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I wish Dr. Patel all the very best and many more years of public service. (2/2)
— Arun Jaitley (@arunjaitley) <a href="https://twitter.com/arunjaitley/status/1072103756056195077?ref_src=twsrc%5Etfw">December 10, 2018</a></blockquote>
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He added that "I wish Dr. Patel all the very best and many more years of public service."&nbsp;

&nbsp;

RBI Governor Urjit Patel has resigned, saying he was doing so for "personal reasons". "On account of personal reasons, I have decided to step down from my current position (RBI Governor) effective immediately.

RBI Governor Urjit Patel has resigned, saying he was doing so for "personal reasons". "On account of personal reasons, I have decided to step down from my current position (RBI Governor) effective immediately. It has been my privilege and honour to serve in the Reserve Bank of India in various capacities over the years," Patel said in a statement. "Support and hard work of RBI staff, officers and management has been proximate driver of Bank’s considerable accomplishments in recent years. I take this opportunity to express gratitude to my colleagues and directors of RBI Central Board and wish them all the best for future," he added. Pointedly, he made no mention of the finance ministry or the government with which he had been tussling with of late over the issue of the bank's reserve funds. The government was of the opinion that the bank should hand over a larger share of them to the government. The government was also keen that the central bank free up credit — by loosening its curbs on the non-banking financial sector — for small and medium enterprises. The government had wanted to kick-start growth. (A general election is to be held before May next year.) Patel is the first RBI governor to step down before completing his term since 1990. The larger battle between the government and Patel had devolved down to one of autonomy. RBI Deputy Governor Viral Acharya had recently warned that any government that does not respect the central bank's financial autonomy will have to face the wrath of the markets. The government however reportedly invoked Section 7 of the RBI act which allows it to issue directions to the central bank. The section has never before been invoked in independent India. "We will miss him immensely," Prime Minister Narendra Modi said in a pair of tweeets after Patel announced his departure. Dr Urjit Patel is an economist of a very high calibre with a deep and insightful understanding of macro-economic issues. He steered the banking system from chaos to order and ensured discipline. Under his leadership, the RBI brought financial stability. — Narendra Modi (@narendramodi) December 10, 2018 × Dr. Urjit Patel is a thorough professional with impeccable integrity. He has been in the Reserve Bank of India for about 6 years as Deputy Governor and Governor. He leaves behind a great legacy. We will miss him immensely. — Narendra Modi (@narendramodi) December 10, 2018 × "He steered the banking system from chaos to order and ensured discipline. Under his leadership, the RBI brought financial stability," Modi added. Finance Minister Arun Jaitley also put out a pair of tweets, saying "It was a pleasure for me to deal with him and benefit from his scholarship." The Government acknowledges with deep sense of appreciation the services rendered by Dr. Urjit Patel to this country both in his capacity as the Governor and the Deputy Governor of The RBI. It was a pleasure for me to deal with him and benefit from his scholarship. (1/2) — Arun Jaitley (@arunjaitley) December 10, 2018 × I wish Dr. Patel all the very best and many more years of public service. (2/2) — Arun Jaitley (@arunjaitley) December 10, 2018 × He added that "I wish Dr. Patel all the very best and many more years of public service."

RBI Governor Urjit Patel resigns, says it's for 'personal reasons'

RBI Governor Urjit Patel steps down, cites 'personal reasons'

PM Modi, Arun Jaitley hail outgoing RBI governor Urjit Patel

Breaking News: Urjit Patel steps down as RBI Governor

Reserve Bank Governor Urjit Patel, who faced the possibility of an unprecedented action from the government over differences on a variety of issues, Monday <a href="http://www.wionews.com/india-news/rbi-governor-urjit-patel-resigns-cites-personal-reasons-182915">resigned from his job citing personal reasons</a>.

Patel, 55, who took over as the 24th Governor of the central bank on September 5, 2016, had the shortest tenure since 1992.

He was hand-picked by the BJP-led government after his predecessor Raghuram Rajan was denied a second term.

"On account of personal reasons, I have decided to step down from my current position effective immediately," Patel said in a brief statement.

His resignation was being speculated right from the time the government cited a never-before-used provision of the RBI Act to get him to consider its views on relaxing lending norms for segments such as small and medium enterprises, appropriate size of reserves the central bank must maintain and easing norms for weak banks.

In his statement, Patel thanked his colleagues at the RBI but made no mention of the government or the finance ministry.

"It has been my privilege and honour to serve in the Reserve Bank of India in various capacities over the years. The support and hard work of RBI staff, officers and management has been the proximate driver of the bank's considerable accomplishments in recent years.

"I take this opportunity to express gratitude to my colleagues and Directors of the RBI Central Board, and wish them all the best for the future," he said.

Patel had more than eight months of the first three-year tenure left and was eligible for a second term as was given to several of his predecessors barring Rajan.

Prior to taking over on September 6, 2016, he was a Deputy Governor overseeing the monetary policy department at the RBI under Rajan and was known as his 'inflation-warrior'.

Patel, who has worked with the International Monetary Fund, Boston Consulting Group and Reliance Industries, among other organisations, took over after Rajan completed his three-year term on September 4.

Patel is among the few with a corporate background to become RBI governor, the top post at the Mint Street that has been previously held by mostly career bureaucrats and economists.

Patel was the eighth RBI deputy governor to be made Governor, the last being YV&nbsp; Reddy. Besides, at least five former governors had served at the IMF before becoming RBI chief, while a few others went on to work at IMF after leaving the central bank.

However, some deputy governors served as governors only for interim periods.&nbsp;

Reserve Bank Governor Urjit Patel, who faced the possibility of an unprecedented action from the government over differences on a variety of issues, Monday resigned from his job citing personal reasons.

Reserve Bank Governor Urjit Patel, who faced the possibility of an unprecedented action from the government over differences on a variety of issues, Monday resigned from his job citing personal reasons. Patel, 55, who took over as the 24th Governor of the central bank on September 5, 2016, had the shortest tenure since 1992. He was hand-picked by the BJP-led government after his predecessor Raghuram Rajan was denied a second term. "On account of personal reasons, I have decided to step down from my current position effective immediately," Patel said in a brief statement. His resignation was being speculated right from the time the government cited a never-before-used provision of the RBI Act to get him to consider its views on relaxing lending norms for segments such as small and medium enterprises, appropriate size of reserves the central bank must maintain and easing norms for weak banks. In his statement, Patel thanked his colleagues at the RBI but made no mention of the government or the finance ministry. "It has been my privilege and honour to serve in the Reserve Bank of India in various capacities over the years. The support and hard work of RBI staff, officers and management has been the proximate driver of the bank's considerable accomplishments in recent years. "I take this opportunity to express gratitude to my colleagues and Directors of the RBI Central Board, and wish them all the best for the future," he said. Patel had more than eight months of the first three-year tenure left and was eligible for a second term as was given to several of his predecessors barring Rajan. Prior to taking over on September 6, 2016, he was a Deputy Governor overseeing the monetary policy department at the RBI under Rajan and was known as his 'inflation-warrior'. Patel, who has worked with the International Monetary Fund, Boston Consulting Group and Reliance Industries, among other organisations, took over after Rajan completed his three-year term on September 4. Patel is among the few with a corporate background to become RBI governor, the top post at the Mint Street that has been previously held by mostly career bureaucrats and economists. Patel was the eighth RBI deputy governor to be made Governor, the last being YV Reddy. Besides, at least five former governors had served at the IMF before becoming RBI chief, while a few others went on to work at IMF after leaving the central bank. However, some deputy governors served as governors only for interim periods.

Profile: Urjit Patel had shortest tenure as RBI governor since 1992

RBI Governor Urjit Patel is believed to have met Prime Minister Narendra Modi last week in a bid to work out a solution on contentious issues that have been flash point between the central bank and the government during the last few weeks.

Sources said Patel was in the national capital on Friday and met senior officials in the Prime Minister's Office (PMO).

The meetings, which some said also included with the Prime Minister, came amid a face-off between the central bank and the finance ministry over issues ranging from the appropriate size of reserves that RBI must maintain to ease of lending norms to step up growth in an election year.

Sources said there are indications that the RBI may create a special dispensation for lending to small and medium enterprises, but it was not immediately clear if an agreement has been worked out to ease liquidity situation for non-banking finance companies (NBFCs) and the RBI parting with its substantial part of its surplus.

Tensions between the RBI and the government have escalated recently, with the Finance Ministry initiating discussion under the never-used-before Section 7 of the RBI Act which empowers the government to issue directions to the RBI Governor.

RBI Deputy 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.

Last week, Economic Affairs Secretary Subhash Chandra Garg had said the government was not in any dire need of funds and that there was no proposal to ask the RBI to transfer Rs 3.6 lakh crore.

He further said the only proposal "under discussion is to fix appropriate economic capital framework of RBI".

Economic capital framework refers to the risk capital required by the central bank while taking into account different risks. The Reserve Bank of India (RBI) has a massive Rs 9.59 lakh crore reserves.

Patel's meetings at the PMO came days before the RBI's crucial board meeting on November 19 during which contentious issues are likely to come up for discussion.

Sources said the government nominee directors and a few independent directors could raise the issue of interim dividend along with the capital framework of RBI.

However, any change in the central bank's economic capital framework can be carried out only after making amendments to the RBI Act, 1934.

Other issues which could be raised include alignment of capital adequacy norms with those in advanced countries and some relaxation in the Prompt Corrective Action framework, sources said, adding more measures to enhance lending to MSMEs and NBFCs may also be discussed.

RBI Governor Urjit Patel is believed to have met Prime Minister Narendra Modi last week in a bid to work out a solution on contentious issues that have been flash point between the central bank and the government during the last few weeks.

RBI Governor Urjit Patel is believed to have met Prime Minister Narendra Modi last week in a bid to work out a solution on contentious issues that have been flash point between the central bank and the government during the last few weeks. Sources said Patel was in the national capital on Friday and met senior officials in the Prime Minister's Office (PMO). The meetings, which some said also included with the Prime Minister, came amid a face-off between the central bank and the finance ministry over issues ranging from the appropriate size of reserves that RBI must maintain to ease of lending norms to step up growth in an election year. Sources said there are indications that the RBI may create a special dispensation for lending to small and medium enterprises, but it was not immediately clear if an agreement has been worked out to ease liquidity situation for non-banking finance companies (NBFCs) and the RBI parting with its substantial part of its surplus. Tensions between the RBI and the government have escalated recently, with the Finance Ministry initiating discussion under the never-used-before Section 7 of the RBI Act which empowers the government to issue directions to the RBI Governor. RBI Deputy 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. Last week, Economic Affairs Secretary Subhash Chandra Garg had said the government was not in any dire need of funds and that there was no proposal to ask the RBI to transfer Rs 3.6 lakh crore. He further said the only proposal "under discussion is to fix appropriate economic capital framework of RBI". Economic capital framework refers to the risk capital required by the central bank while taking into account different risks. The Reserve Bank of India (RBI) has a massive Rs 9.59 lakh crore reserves. Patel's meetings at the PMO came days before the RBI's crucial board meeting on November 19 during which contentious issues are likely to come up for discussion. Sources said the government nominee directors and a few independent directors could raise the issue of interim dividend along with the capital framework of RBI. However, any change in the central bank's economic capital framework can be carried out only after making amendments to the RBI Act, 1934. Other issues which could be raised include alignment of capital adequacy norms with those in advanced countries and some relaxation in the Prompt Corrective Action framework, sources said, adding more measures to enhance lending to MSMEs and NBFCs may also be discussed.

RBI Governor Urjit Patel had met PM Modi possibly to sort out differences with Centre

Reserve Bank of India (RBI) Governor <a href="http://www.wionews.com/business-economy/rbi-head-should-work-with-government-or-quit-says-rss-official-174773">Urjit Patel could resign</a> at the central bank's next board meeting on November 19, online financial publication Moneylife reported on Wednesday, citing sources in touch with the governor.

The government and RBI have been <a href="http://www.wionews.com/business-economy/govt-to-continue-pressing-rbi-for-relaxing-norms-funds-sources-175945">fighting for weeks</a> over how much autonomy the RBI should have as the administration of Prime Minister Narendra Modi seeks to reduce curbs on lending and to gain access to the RBI's surplus reserves.

The rift worsened late last month when one of the bank's deputy governors said in a speech that undermining central bank independence could be “potentially catastrophic”.

Moneylife's report said if the feud escalates further, there is "a good chance" Patel will resign at the RBI's next meeting, saying he was tired of the struggle with the government, and it was having a negative impact on his health.

The report did not cite the number of sources. The RBI did not immediately respond to a request for comment.

The story was written by veteran Indian financial journalist Sucheta Dalal who is well known for her investigative reporting. She is one of the founders of Moneylife.

Reuters reported on Tuesday that the government intends to keep pressing its demands even if it risks provoking a resignation by Patel, according to three sources familiar with the government's thinking.

Reserve Bank of India (RBI) Governor Urjit Patel could resign at the central bank's next board meeting on November 19, online financial publication Moneylife reported on Wednesday, citing sources in touch with the governor.

Reserve Bank of India (RBI) Governor Urjit Patel could resign at the central bank's next board meeting on November 19, online financial publication Moneylife reported on Wednesday, citing sources in touch with the governor. The government and RBI have been fighting for weeks over how much autonomy the RBI should have as the administration of Prime Minister Narendra Modi seeks to reduce curbs on lending and to gain access to the RBI's surplus reserves. The rift worsened late last month when one of the bank's deputy governors said in a speech that undermining central bank independence could be “potentially catastrophic”. Moneylife's report said if the feud escalates further, there is "a good chance" Patel will resign at the RBI's next meeting, saying he was tired of the struggle with the government, and it was having a negative impact on his health. The report did not cite the number of sources. The RBI did not immediately respond to a request for comment. The story was written by veteran Indian financial journalist Sucheta Dalal who is well known for her investigative reporting. She is one of the founders of Moneylife. Reuters reported on Tuesday that the government intends to keep pressing its demands even if it risks provoking a resignation by Patel, according to three sources familiar with the government's thinking.

RBI governor Urjit Patel could resign on November 19: Report

The government intends to <a href="http://www.wionews.com/business-economy/govt-to-continue-pressing-rbi-for-relaxing-norms-funds-sources-175945">keep pressing demands</a> for the country's central bank to relax lending curbs and hand over surplus reserves even if it risks provoking a <a href="http://www.wionews.com/india-news/rbi-governor-urjit-patel-could-resign-on-november-19-report-175967">resignation by the bank's governor</a>, three sources familiar with the government's thinking told Reuters.

While there appeared to be a partial truce last week when the government said it respected the autonomy of the Reserve Bank of India (RBI), the sources said the government will turn up the heat at the bank's central board of directors meeting on Nov. 19.

And RBI Governor Urjit Patel will be a key focus of the pressure from a group of directors who support the government's position, according to the New Delhi-based sources, who declined to be named due to the sensitivity of the matter.

"We want the RBI governor to accept the priorities of the economy and to discuss these with board members," said one of the sources, a senior government official with direct knowledge of deliberations. "If he wants to take decisions unilaterally, it will be better for him to quit."

Investors and traders warn that if Patel quits it will create uncertainty and undermine India's already-weak financial markets. They have been hurt in recent weeks because of defaults by a major financing company.

A Finance Ministry spokesman declined to comment for this story.

The online financial publication Moneylife reported on Wednesday that Patel could resign at the central bank's next board meeting on Nov. 19, citing sources in touch with the governor.

Moneylife said that Patel was tired of the struggle with the government, and it was having a negative impact on his health.

The RBI did not respond to requests for comment for this article or in response to the Moneylife report.

'POTENTIALLY CATASTROPHIC'

Tensions between the two sides came to the fore last month when RBI Deputy Governor Viral Acharya gave a speech that blew the lid off a fractious dispute between the bank and the government of Prime Minister Narendra Modi on issues ranging from lending curbs to who controls the institution's reserves.

Acharya said that undermining central bank independence could be “potentially catastrophic”, and he even cited meddling by the Argentine government in the affairs of its central bank in 2010 – prompting big drops in that nation’s financial markets - as a sign of how bad things can get.

For its part, government officials say they have been increasingly frustrated by the intransigence of Patel and his team to address its demands and engage in constructive dialogue.

The RBI has consistently pushed back against calls from the government to hand over more money from its reserves to help fund the fiscal deficit.

The ruling Hindu nationalist Bharatiya Janata Party is also keen to reduce curbs on the shadow banking sector and increase overall lending to small and medium-sized businesses. The aim is to help offset economic headwinds from low farm prices and high fuel prices ahead of a general election due by next May and key state elections in a few weeks.

"We will do everything to protect the interests of the economy," one of the members of the RBI central board told Reuters, noting the governor and his team would have to "explain, defend and justify" their decisions at the board meeting.

It is unclear, though, how the government will seek to exert pressure through the RBI's Central Board as the body is a largely symbolic one, which has never had a direct say in the bank's directives and policies, according to two additional sources with knowledge of the law under which the central bank operates.

"The role of the board has typically been to supervise the workings of the RBI, like internal audit and recruitment. But the RBI is not really accountable to the board for regulatory and operational issues," said one of the sources, saying this would only change if the government invokes Section 7 of the RBI Act allowing it to dictate policy to the central bank.

"We don't know whether the board will supersede the RBI in that case," said the source. "This kind of situation has never arisen before."

Still, the government sources say they will find ways to increase pressure on the RBI and Patel via the board before moving to invoke Section 7.

"Patel and his team must recognise the period of an invisible RBI board is over," one of the New Delhi-based sources said, noting that the RBI will sooner or later have to fall in line.

Patel's predecessor Raghuram Rajan defended the RBI's call for autonomy saying that the central bank's responsibility is to secure financial stability and it has the right to say "no" to government proposals that could lead to instability.

"The RBI is something like a seatbelt," Rajan, who is a professor at the University of Chicago Booth School of Business, told CNBC-TV18.

"As a driver, being the government, it has the possibility of not putting on the seatbelt, but of course, if you don’t put on the seatbelt, you can get into an accident which can be quite severe."

N.R. Bhanumurthy, an economist at the National Institute of Public Finance and Policy, a New Delhi-based think tank, partly funded by the finance ministry, said the RBI and the government were dealing with the same problem though there was a difference of opinion on how to solve it.

"While the government is looking for short-term solutions, the RBI is focused on long-term solutions," he said, adding that despite disagreements, both could resolve their differences.

"If the RBI governor is forced to resign, it will be a huge setback for the economy."

The government intends to keep pressing demands for the country's central bank to relax lending curbs and hand over surplus reserves even if it risks provoking a resignation by the bank's governor, three sources familiar with the government's thinking told Reuters.

The government intends to keep pressing demands for the country's central bank to relax lending curbs and hand over surplus reserves even if it risks provoking a resignation by the bank's governor, three sources familiar with the government's thinking told Reuters. While there appeared to be a partial truce last week when the government said it respected the autonomy of the Reserve Bank of India (RBI), the sources said the government will turn up the heat at the bank's central board of directors meeting on Nov. 19. And RBI Governor Urjit Patel will be a key focus of the pressure from a group of directors who support the government's position, according to the New Delhi-based sources, who declined to be named due to the sensitivity of the matter. "We want the RBI governor to accept the priorities of the economy and to discuss these with board members," said one of the sources, a senior government official with direct knowledge of deliberations. "If he wants to take decisions unilaterally, it will be better for him to quit." Investors and traders warn that if Patel quits it will create uncertainty and undermine India's already-weak financial markets. They have been hurt in recent weeks because of defaults by a major financing company. A Finance Ministry spokesman declined to comment for this story. The online financial publication Moneylife reported on Wednesday that Patel could resign at the central bank's next board meeting on Nov. 19, citing sources in touch with the governor. Moneylife said that Patel was tired of the struggle with the government, and it was having a negative impact on his health. The RBI did not respond to requests for comment for this article or in response to the Moneylife report. 'POTENTIALLY CATASTROPHIC' Tensions between the two sides came to the fore last month when RBI Deputy Governor Viral Acharya gave a speech that blew the lid off a fractious dispute between the bank and the government of Prime Minister Narendra Modi on issues ranging from lending curbs to who controls the institution's reserves. Acharya said that undermining central bank independence could be “potentially catastrophic”, and he even cited meddling by the Argentine government in the affairs of its central bank in 2010 – prompting big drops in that nation’s financial markets - as a sign of how bad things can get. For its part, government officials say they have been increasingly frustrated by the intransigence of Patel and his team to address its demands and engage in constructive dialogue. The RBI has consistently pushed back against calls from the government to hand over more money from its reserves to help fund the fiscal deficit. The ruling Hindu nationalist Bharatiya Janata Party is also keen to reduce curbs on the shadow banking sector and increase overall lending to small and medium-sized businesses. The aim is to help offset economic headwinds from low farm prices and high fuel prices ahead of a general election due by next May and key state elections in a few weeks. "We will do everything to protect the interests of the economy," one of the members of the RBI central board told Reuters, noting the governor and his team would have to "explain, defend and justify" their decisions at the board meeting. It is unclear, though, how the government will seek to exert pressure through the RBI's Central Board as the body is a largely symbolic one, which has never had a direct say in the bank's directives and policies, according to two additional sources with knowledge of the law under which the central bank operates. "The role of the board has typically been to supervise the workings of the RBI, like internal audit and recruitment. But the RBI is not really accountable to the board for regulatory and operational issues," said one of the sources, saying this would only change if the government invokes Section 7 of the RBI Act allowing it to dictate policy to the central bank. "We don't know whether the board will supersede the RBI in that case," said the source. "This kind of situation has never arisen before." Still, the government sources say they will find ways to increase pressure on the RBI and Patel via the board before moving to invoke Section 7. "Patel and his team must recognise the period of an invisible RBI board is over," one of the New Delhi-based sources said, noting that the RBI will sooner or later have to fall in line. Patel's predecessor Raghuram Rajan defended the RBI's call for autonomy saying that the central bank's responsibility is to secure financial stability and it has the right to say "no" to government proposals that could lead to instability. "The RBI is something like a seatbelt," Rajan, who is a professor at the University of Chicago Booth School of Business, told CNBC-TV18. "As a driver, being the government, it has the possibility of not putting on the seatbelt, but of course, if you don’t put on the seatbelt, you can get into an accident which can be quite severe." N.R. Bhanumurthy, an economist at the National Institute of Public Finance and Policy, a New Delhi-based think tank, partly funded by the finance ministry, said the RBI and the government were dealing with the same problem though there was a difference of opinion on how to solve it. "While the government is looking for short-term solutions, the RBI is focused on long-term solutions," he said, adding that despite disagreements, both could resolve their differences. "If the RBI governor is forced to resign, it will be a huge setback for the economy."

Government set to turn up heat on RBI Governor Urjit Patel: Sources

Reserve Bank of India Governor Urjit Patel may consider resigning from his post given a <a href="http://www.wionews.com/india-news/government-very-upset-with-rbi-for-making-rift-public-sources-174359">breakdown in relations</a> with the government, TV channels reported on Wednesday, sparking a sell-off in the rupee and bonds.

Indian television channels CNBC-TV18 and ET Now cited sources as saying that Patel could quit.

The RBI and the finance ministry declined to comment.

Also read:&nbsp;<a href="http://www.wionews.com/india-news/government-invokes-never-used-before-powers-to-issue-directions-to-rbi-report-174517">Government invokes never-used-before powers to issue directions to RBI governor</a>

The government has invoked never-before-used powers under the RBI Act that allow it to issue directions to the central bank governor on matters of public interest, the Economic Times newspaper reported.

It said the government had sent letters to the RBI governor in recent weeks exercising powers under Section 7 of the RBI Act on issues ranging from liquidity for non-bank finance companies, capital requirements for weak banks and lending to small- and medium-sized companies.

Section 7 says that 'the Central Government may from time to time give such directions to the Bank as it may, after consultation with the Governor of the Bank, consider necessary in the public interest', a statute that has not been used in independent India, according to the Economic Times.

The 10-year benchmark bond yield rose to 7.87 per cent from its previous close of 7.83 per cent.

The rupee fell to 73.99 to the dollar from 73.6750 on Tuesday, after touching 74.04, its lowest since October 15.

"It is difficult to believe that the RBI governor will resign because it is unprecedented and would look quite irresponsible and (an) immature step," said a senior trader at a foreign bank. "But it is quite worrisome to see the government trying to continuously interfere into the RBI's operations."

IN THE OPEN

Tensions between the RBI and the government have spilled into the public domain after Deputy Governor Viral Acharya said last week that undermining central bank independence could be "potentially catastrophic", indicating the authority is pushing back against government pressure to relax its policies and reduce its powers ahead of a general election due by May.

Adding to the row, Finance Minister Arun Jaitley blamed the central bank for failing to stop a lending spree during 2008-2014 that left banks with $150 billion of bad debt.

Patel and other regulators, including the Securities and Exchange Board of India, the Insurance Regulatory and Development Authority and the Pension Fund Regulatory and Development Authority, met Jaitley and other top finance ministry officials at a meeting of the Financial Stability and Development Council on Tuesday to discuss the liquidity crunch.

However, there was no sign of resignation by Patel at the meeting, officials said.

Patel and his deputy governors are expected to meet top finance ministry officials on Friday.

Reserve Bank of India Governor Urjit Patel may consider resigning from his post given a breakdown in relations with the government, TV channels reported on Wednesday, sparking a sell-off in the rupee and bonds.

Reserve Bank of India Governor Urjit Patel may consider resigning from his post given a breakdown in relations with the government, TV channels reported on Wednesday, sparking a sell-off in the rupee and bonds. Indian television channels CNBC-TV18 and ET Now cited sources as saying that Patel could quit. The RBI and the finance ministry declined to comment. Also read: Government invokes never-used-before powers to issue directions to RBI governor The government has invoked never-before-used powers under the RBI Act that allow it to issue directions to the central bank governor on matters of public interest, the Economic Times newspaper reported. It said the government had sent letters to the RBI governor in recent weeks exercising powers under Section 7 of the RBI Act on issues ranging from liquidity for non-bank finance companies, capital requirements for weak banks and lending to small- and medium-sized companies. Section 7 says that 'the Central Government may from time to time give such directions to the Bank as it may, after consultation with the Governor of the Bank, consider necessary in the public interest', a statute that has not been used in independent India, according to the Economic Times. The 10-year benchmark bond yield rose to 7.87 per cent from its previous close of 7.83 per cent. The rupee fell to 73.99 to the dollar from 73.6750 on Tuesday, after touching 74.04, its lowest since October 15. "It is difficult to believe that the RBI governor will resign because it is unprecedented and would look quite irresponsible and (an) immature step," said a senior trader at a foreign bank. "But it is quite worrisome to see the government trying to continuously interfere into the RBI's operations." IN THE OPEN Tensions between the RBI and the government have spilled into the public domain after Deputy Governor Viral Acharya said last week that undermining central bank independence could be "potentially catastrophic", indicating the authority is pushing back against government pressure to relax its policies and reduce its powers ahead of a general election due by May. Adding to the row, Finance Minister Arun Jaitley blamed the central bank for failing to stop a lending spree during 2008-2014 that left banks with $150 billion of bad debt. Patel and other regulators, including the Securities and Exchange Board of India, the Insurance Regulatory and Development Authority and the Pension Fund Regulatory and Development Authority, met Jaitley and other top finance ministry officials at a meeting of the Financial Stability and Development Council on Tuesday to discuss the liquidity crunch. However, there was no sign of resignation by Patel at the meeting, officials said. Patel and his deputy governors are expected to meet top finance ministry officials on Friday.

RBI Governor Urjit Patel may consider resigning after rift with government: Report

What the government giveth, the government taketh. Beginning 1934, the Reserve Bank of India has enjoyed uninterrupted and unquestionable primacy in all things monetary in India.&nbsp;

The sudden volte-face by the government, has therefore shaken the RBI to its very foundations. When the inter-ministerial committee (IC) was constituted in October 2017, little did the RBI realise that it would result in ending its long era of dominance over regulating payment systems in India.

A quick flashback takes us to the RBI Act of 1934, which vested all matters monetary and regulatory with the central bank. This was consolidated with the Payment and Settlement Systems Act, 2007 (PSS Act) designating RBI, the banking regulator, as the over seer for all forms of payment systems.

The IC Report with its recommendation for a Payment Regulatory Board (PRB) with RBI being a minority stakeholder, has truly shaken and stirred the regulator, who till date exercised a monopoly over proceedings.&nbsp;

Even under the PSS Act of 2007, there was a central board comprised only of RBI representatives with its governor in the chair. The PRB, first mooted under the Finance Act 2017, paved the first step towards the dilution of RBI’s monopoly with its inclusion of equal representation of three central government representatives along with three RBI officials. The Finance Act, however, still vested the RBI governor with the position of ex-officio chairperson.

Then came the blow through the IC Report, which proposes for any “Person appointed by the government in consultation with the RBI”, to be appointed as the ex-officio chairperson.&nbsp;

Further, with the increase in the composition of the PRB to seven members with four (including the chairperson) being central government representatives, RBI clearly becomes a minority presence.

The central bank has not questioned government representation on the proposed PRB, but has voiced strong dissent against the dilution of its powers – especially of the chairperson no longer being only the RBI governor.&nbsp;

It has therefore insisted on this as also for veto powers to the chairperson, to ensure its majority. Its claim is based inter alia on its role as the banking regulator and hence the need for harmonious regulations.

The IC’s concessions to RBI’s dissent is to include the need for the chairperson to have “experience in the central banking function” and for RBI to have the power to “make a reference” to the PRB for consideration of issues pertaining to monetary policies. Neither of these meets the RBI’s pitch for retaining its power over regulating payment systems.

RBI faces a strong threat to unfettered primacy over regulating payment systems and its fear that this is only the beginning, may also not be misconceived. After all, RBI is no stranger to trespassing on alternate turfs, as was evident from its April 6, 2018, circular on financial data localisation by all payment systems, upstaging the then awaited government committee report.

The possibilities facing RBI now are (a) divestment of powers over payment systems, (b) dilution of its monopoly over regulating payment systems to merely a recommendatory role and (c) being reduced from a monopolistic regulatory position to that of an advisory one.&nbsp;

The implications for the nation are larger with the central government taking back the power to regulate payment systems instead of the settled construct of a unitary regulatory body exercising powers over all things monetary.&nbsp;

On one hand, this may reduce the now palpable friction between government policies or intent and regulatory execution (through RBI) and ensure harmony. On the other, monetary policies will seesaw with every change in the government. &nbsp;

Such state of flux may not augur well for certainty or stability in monetary policies. Internal turf wars then become a definitive possibility.

Legally speaking, RBI would be hard pressed to prove its claim to retain its monopolistic regulatory right. The sovereign right over deciding India’s monetary policy vests with the central government.

RBI’s right to regulate payment systems is through statutory authority vested under the PSS Act of 2007. This, of course, can or may be modified through parliamentary process, which is what the proposed amendments to the PSS Act envisages.&nbsp;

Prolonged vesting of authority in RBI by itself is therefore not going to be sufficient for the central bank to sustain its claim. The separation of powers argued by the RBI in its dissent note is one of vested authority and not a constitutional one.&nbsp;

The RBI dissent is that of a singular minority in the report of the IC and the majority view may therefore prevail. In any event, the report itself is merely a recommendation. It is for the houses of Parliament (or the Finance Act route) to decide the future of regulation of payment systems.&nbsp;

Payment systems now permeate chat apps and online games. In just a decade, private, especially international players, have slowly become the primary or preferred payment mechanisms, as opposed to banks. Despite tightening of regulation, private players have consistently found loopholes.

The recent thrust has been towards digital payment alternatives, especially after demonetisation.&nbsp;

In a world ill-equipped to deal with evolving technologies – abject digital illiteracy, poor enforcement mechanisms against evolving cyber-crimes, financial frauds, Ponzi schemes and technology-enabled crimes, the urgent need is for a strong regulator with sufficient powers to not only prevent, but to also protect and punish.&nbsp;

 
(This article was originally published on DNA. Read the <a href="https://www.dnaindia.com/analysis/column-rocking-the-central-bank-2680325">original article</a>)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

&nbsp;

What the government giveth, the government taketh. Beginning 1934, the Reserve Bank of India has enjoyed uninterrupted and unquestionable primacy in all things monetary in India.

What the government giveth, the government taketh. Beginning 1934, the Reserve Bank of India has enjoyed uninterrupted and unquestionable primacy in all things monetary in India. The sudden volte-face by the government, has therefore shaken the RBI to its very foundations. When the inter-ministerial committee (IC) was constituted in October 2017, little did the RBI realise that it would result in ending its long era of dominance over regulating payment systems in India. A quick flashback takes us to the RBI Act of 1934, which vested all matters monetary and regulatory with the central bank. This was consolidated with the Payment and Settlement Systems Act, 2007 (PSS Act) designating RBI, the banking regulator, as the over seer for all forms of payment systems. The IC Report with its recommendation for a Payment Regulatory Board (PRB) with RBI being a minority stakeholder, has truly shaken and stirred the regulator, who till date exercised a monopoly over proceedings. Even under the PSS Act of 2007, there was a central board comprised only of RBI representatives with its governor in the chair. The PRB, first mooted under the Finance Act 2017, paved the first step towards the dilution of RBI’s monopoly with its inclusion of equal representation of three central government representatives along with three RBI officials. The Finance Act, however, still vested the RBI governor with the position of ex-officio chairperson. Then came the blow through the IC Report, which proposes for any “Person appointed by the government in consultation with the RBI”, to be appointed as the ex-officio chairperson. Further, with the increase in the composition of the PRB to seven members with four (including the chairperson) being central government representatives, RBI clearly becomes a minority presence. The central bank has not questioned government representation on the proposed PRB, but has voiced strong dissent against the dilution of its powers – especially of the chairperson no longer being only the RBI governor. It has therefore insisted on this as also for veto powers to the chairperson, to ensure its majority. Its claim is based inter alia on its role as the banking regulator and hence the need for harmonious regulations. The IC’s concessions to RBI’s dissent is to include the need for the chairperson to have “experience in the central banking function” and for RBI to have the power to “make a reference” to the PRB for consideration of issues pertaining to monetary policies. Neither of these meets the RBI’s pitch for retaining its power over regulating payment systems. RBI faces a strong threat to unfettered primacy over regulating payment systems and its fear that this is only the beginning, may also not be misconceived. After all, RBI is no stranger to trespassing on alternate turfs, as was evident from its April 6, 2018, circular on financial data localisation by all payment systems, upstaging the then awaited government committee report. The possibilities facing RBI now are (a) divestment of powers over payment systems, (b) dilution of its monopoly over regulating payment systems to merely a recommendatory role and (c) being reduced from a monopolistic regulatory position to that of an advisory one. The implications for the nation are larger with the central government taking back the power to regulate payment systems instead of the settled construct of a unitary regulatory body exercising powers over all things monetary. On one hand, this may reduce the now palpable friction between government policies or intent and regulatory execution (through RBI) and ensure harmony. On the other, monetary policies will seesaw with every change in the government. Such state of flux may not augur well for certainty or stability in monetary policies. Internal turf wars then become a definitive possibility. Legally speaking, RBI would be hard pressed to prove its claim to retain its monopolistic regulatory right. The sovereign right over deciding India’s monetary policy vests with the central government. RBI’s right to regulate payment systems is through statutory authority vested under the PSS Act of 2007. This, of course, can or may be modified through parliamentary process, which is what the proposed amendments to the PSS Act envisages. Prolonged vesting of authority in RBI by itself is therefore not going to be sufficient for the central bank to sustain its claim. The separation of powers argued by the RBI in its dissent note is one of vested authority and not a constitutional one. The RBI dissent is that of a singular minority in the report of the IC and the majority view may therefore prevail. In any event, the report itself is merely a recommendation. It is for the houses of Parliament (or the Finance Act route) to decide the future of regulation of payment systems. Payment systems now permeate chat apps and online games. In just a decade, private, especially international players, have slowly become the primary or preferred payment mechanisms, as opposed to banks. Despite tightening of regulation, private players have consistently found loopholes. The recent thrust has been towards digital payment alternatives, especially after demonetisation. In a world ill-equipped to deal with evolving technologies – abject digital illiteracy, poor enforcement mechanisms against evolving cyber-crimes, financial frauds, Ponzi schemes and technology-enabled crimes, the urgent need is for a strong regulator with sufficient powers to not only prevent, but to also protect and punish. (This article was originally published on DNA. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Rocking the central bank

Asserting that the Indian economy turned in a resilient performance in 2017-18, Reserve Bank of India (RBI) Governor Urjit Patel has said the country's growth is expected to accelerate next fiscal.

Mr Patel was addressing the International Monetary Finance Committee here yesterday.

"The Indian economy turned in a resilient performance in 2017-18," Mr Patel said.

Although the real GDP growth was moderated to 6.6 per cent from 7.1 per cent a year ago, there was a strong rebound in the second half of the year on the back of a turnaround in investment demand, he said.

This was supported by an acceleration in manufacturing, rising sales growth, a pick-up in capacity utilisation, strong activity in the services sector and a record agricultural harvest, the RBI governor added.

"Several factors are expected to help accelerate the pace of growth in 2018-19. There are now clearer signs that the revival in investment activity will be sustained," he said.

Global demand has been improving, which should encourage exports and boost fresh investments, Patel said, adding that on the whole, real GDP growth was expected to expand at 7.4 per cent in 2018-19, with risks evenly balanced.

In his address, Mr Patel said since November 2016, headline consumer price inflation had generally remained below the medium-term target of four per cent.

An unusual spike in vegetables prices pushed up inflation to a recent peak of 5.2 per cent in December, but it eased in subsequent months to reach 4.3 per cent in March, he said.

Mr Patel said several factors were likely to influence the inflation outlook, including a possible moderation in food prices if the monsoon turned out to be normal and was supported by an effective food supply management.

"Countervailing this, upside risks emanate from the distinct hardening bias in crude oil prices, the steady firming up of inflation excluding food and fuel mirroring pick up in domestic demand, and spillovers from financial volatility as markets re-price the path of monetary policy normalisation by systemic central banks," he said.

Noting that risks to inflation are tilted to the upside, the monetary policy rate was kept unchanged at 6.0 per cent in April 2018 with a neutral stance, Mr Patel said.

Asserting that the government is committed to fiscal prudence, the RBI governor said aided by buoyancy in tax revenues and rationalisation of subsidies, the gross fiscal deficit (GFD) of the central government has been steadily brought down since 2013-14 to 3.5 per cent of GDP in 2017-18 without compromising on public investment requirements and social sector spending.

The GFD is budgeted lower at 3.3 per cent in 2018-19, he said. The government has accepted a debt rule that will bring down the debt-to-GDP ratio to 40 per cent over a period of time by 2024-25.

Mr Patel said the goods and services tax (GST), which was implemented from July 2017 has reformed the system of indirect taxes by simplifying payments and credits, and improving the efficiency of movement of goods across the country.

Automation of tax payments and 'team-based assessment with dynamic jurisdiction' without direct interface with tax payers has improved overall efficiency and transparency of revenue administration, he said.

Mr Patel said with the pace of import growth relative to that of exports, the current account deficit (CAD) expanded from 0.7 per cent in 2016-17 to 1.9 per cent for the first nine months of 2017-18.

External financing conditions remained comfortable, boosted mainly by robust inflows of foreign direct investment (FDI), he said.

The UNCTAD's survey of multinational enterprises ranked India as the third most favoured destination for FDI for 2017-19. Reflecting these developments, India's foreign exchange reserves at $424 billion were equivalent of 11 months of imports, he added. 
"India has persevered with structural reforms over a wide area ranging from a flexible inflation targeting framework for monetary policy liberalisation of FDI flows a unique identification (Aadhaar) backed direct benefit transfers an insolvency and bankruptcy code the GST realty reforms and a swathe of measures for improvement in the ease of doing business more generally," he said.

These factors have improved India's global ranking in the World Bank's Ease of Doing Business, Mr Patel added.

'Several factors are expected to help accelerate the pace of growth in 2018-19. There are now clearer signs that the revival in investment activity will be sustained,' he said

Asserting that the Indian economy turned in a resilient performance in 2017-18, Reserve Bank of India (RBI) Governor Urjit Patel has said the country's growth is expected to accelerate next fiscal. Mr Patel was addressing the International Monetary Finance Committee here yesterday. "The Indian economy turned in a resilient performance in 2017-18," Mr Patel said. Although the real GDP growth was moderated to 6.6 per cent from 7.1 per cent a year ago, there was a strong rebound in the second half of the year on the back of a turnaround in investment demand, he said. This was supported by an acceleration in manufacturing, rising sales growth, a pick-up in capacity utilisation, strong activity in the services sector and a record agricultural harvest, the RBI governor added. "Several factors are expected to help accelerate the pace of growth in 2018-19. There are now clearer signs that the revival in investment activity will be sustained," he said. Global demand has been improving, which should encourage exports and boost fresh investments, Patel said, adding that on the whole, real GDP growth was expected to expand at 7.4 per cent in 2018-19, with risks evenly balanced. In his address, Mr Patel said since November 2016, headline consumer price inflation had generally remained below the medium-term target of four per cent. An unusual spike in vegetables prices pushed up inflation to a recent peak of 5.2 per cent in December, but it eased in subsequent months to reach 4.3 per cent in March, he said. Mr Patel said several factors were likely to influence the inflation outlook, including a possible moderation in food prices if the monsoon turned out to be normal and was supported by an effective food supply management. "Countervailing this, upside risks emanate from the distinct hardening bias in crude oil prices, the steady firming up of inflation excluding food and fuel mirroring pick up in domestic demand, and spillovers from financial volatility as markets re-price the path of monetary policy normalisation by systemic central banks," he said. Noting that risks to inflation are tilted to the upside, the monetary policy rate was kept unchanged at 6.0 per cent in April 2018 with a neutral stance, Mr Patel said. Asserting that the government is committed to fiscal prudence, the RBI governor said aided by buoyancy in tax revenues and rationalisation of subsidies, the gross fiscal deficit (GFD) of the central government has been steadily brought down since 2013-14 to 3.5 per cent of GDP in 2017-18 without compromising on public investment requirements and social sector spending. The GFD is budgeted lower at 3.3 per cent in 2018-19, he said. The government has accepted a debt rule that will bring down the debt-to-GDP ratio to 40 per cent over a period of time by 2024-25. Mr Patel said the goods and services tax (GST), which was implemented from July 2017 has reformed the system of indirect taxes by simplifying payments and credits, and improving the efficiency of movement of goods across the country. Automation of tax payments and 'team-based assessment with dynamic jurisdiction' without direct interface with tax payers has improved overall efficiency and transparency of revenue administration, he said. Mr Patel said with the pace of import growth relative to that of exports, the current account deficit (CAD) expanded from 0.7 per cent in 2016-17 to 1.9 per cent for the first nine months of 2017-18. External financing conditions remained comfortable, boosted mainly by robust inflows of foreign direct investment (FDI), he said. The UNCTAD's survey of multinational enterprises ranked India as the third most favoured destination for FDI for 2017-19. Reflecting these developments, India's foreign exchange reserves at $424 billion were equivalent of 11 months of imports, he added. "India has persevered with structural reforms over a wide area ranging from a flexible inflation targeting framework for monetary policy liberalisation of FDI flows a unique identification (Aadhaar) backed direct benefit transfers an insolvency and bankruptcy code the GST realty reforms and a swathe of measures for improvement in the ease of doing business more generally," he said. These factors have improved India's global ranking in the World Bank's Ease of Doing Business, Mr Patel added.

India's pace of growth to accelerate in 2018-19: RBI governor

The Reserve Bank of India chief said on Wednesday that it had &quot;very limited authority&quot; over state-run banks and called for reforms in the wake of a $2 billion fraud to give the regulator the same powers to police state-run banks as it has over private lenders.

Reserve Bank of India (RBI) Governor Urjit Patel defended the central bank`s role in the aftermath of the Punjab National Bank (PNB) fraud case and launched an indirect broadside against the Indian government, which has been critical of the role of the regulator and auditors in failing to spot the huge alleged scam.

In a speech at a law university in the Western Indian state of Gujarat, Patel said there were numerous limitations in the RBI`s powers over state-run lenders, such as its inability to remove directors, replace management, push through a merger or initiate liquidation.

While the RBI regulates all banks in India, state-run banks are also regulated by the government, which owns majority-stakes in them.

This has, in effect, led to a system of &quot;dual regulation&quot;, said Patel, adding that this &quot;fault line is bound to lead to tremors such as the most recent fraud&quot;.

The unravelling PNB fraud, the biggest in Indian banking history, has stunned the financial sector and pushed the RBI and government to crack down on bank systems and lending practices.

In a speech at a law university in the Western Indian state of Gujarat, Patel said there were numerous limitations in the RBI`s powers over state-run lenders

The Reserve Bank of India chief said on Wednesday that it had "very limited authority" over state-run banks and called for reforms in the wake of a $2 billion fraud to give the regulator the same powers to police state-run banks as it has over private lenders. Reserve Bank of India (RBI) Governor Urjit Patel defended the central bank`s role in the aftermath of the Punjab National Bank (PNB) fraud case and launched an indirect broadside against the Indian government, which has been critical of the role of the regulator and auditors in failing to spot the huge alleged scam. In a speech at a law university in the Western Indian state of Gujarat, Patel said there were numerous limitations in the RBI`s powers over state-run lenders, such as its inability to remove directors, replace management, push through a merger or initiate liquidation. While the RBI regulates all banks in India, state-run banks are also regulated by the government, which owns majority-stakes in them. This has, in effect, led to a system of "dual regulation", said Patel, adding that this "fault line is bound to lead to tremors such as the most recent fraud". The unravelling PNB fraud, the biggest in Indian banking history, has stunned the financial sector and pushed the RBI and government to crack down on bank systems and lending practices.

RBI Governor Urjit Patel calls for more power over state-run banks in wake of PNB fraud

The Aam Aadmi Party has decided to nominate Raghuram Rajan, the former Reserve Bank Governor, to the Rajya Sabha, reports said.&nbsp;

Reports indicate that his name is being considered for one of the three Rajya Sabha seats from Delhi.

His name was discussed at a party meeting which included AAP chief and Delhi chief minister Arvind Kejriwal.

A letter has also been sent to him.&nbsp;However, the letter is still awaiting a reply from the ex-RBI chief.&nbsp;

It is also speculated that the party is looking for candidates other than politicians for the three Rajya Sabha openings.&nbsp;

Rajan&#39;s three-year term as RBI Governor ended on September 4, 2016.&nbsp;

He currently teaches at the University of Chicago.&nbsp;&nbsp;

Reports indicate that his name is being considered for one of the three Rajya Sabha seats from Delhi

The Aam Aadmi Party has decided to nominate Raghuram Rajan, the former Reserve Bank Governor, to the Rajya Sabha, reports said. Reports indicate that his name is being considered for one of the three Rajya Sabha seats from Delhi. His name was discussed at a party meeting which included AAP chief and Delhi chief minister Arvind Kejriwal. A letter has also been sent to him. However, the letter is still awaiting a reply from the ex-RBI chief. It is also speculated that the party is looking for candidates other than politicians for the three Rajya Sabha openings. Rajan's three-year term as RBI Governor ended on September 4, 2016. He currently teaches at the University of Chicago.

AAP may nominate ex- RBI chief Raghuram Rajan to Rajya Sabha

New one rupee notes with predominantly pink-green on obverse and reverse in combination with other colours will be soon put into circulation.

The notes bearing the rupee symbol have been printed by the Government of India.

At present, one rupee coins are minted. Printing of one rupee notes was discontinued in 1994 but was relaunched in 2015.

&quot;The Reserve Bank of India will soon put into circulation currency notes in one rupee denomination,&quot; the central bank said in a statement.

The note will bear the signature of Shaktikanta Das, Secretary in the Ministry of Finance. Rest other currency notes bear the signature of the RBI Governor.

The numbering will be in black at right hand bottom portion of the note.

On the reverse side, the year &#39;2017&#39; is mentioned. There is also representation of One Rupee coin with rupee symbol having floral design and the surrounding design consists of the picture of &#39;Sagar Samrat&#39; the oil exploration platform.

&quot;The colour of One Rupee Currency Note shall be predominantly pink green on obverse and reverse in combination with others,&quot; the RBI said.

(PTI)

Printing of one rupee notes was discontinued in 1994 but was relaunched in 2015

New one rupee notes with predominantly pink-green on obverse and reverse in combination with other colours will be soon put into circulation. The notes bearing the rupee symbol have been printed by the Government of India. At present, one rupee coins are minted. Printing of one rupee notes was discontinued in 1994 but was relaunched in 2015. "The Reserve Bank of India will soon put into circulation currency notes in one rupee denomination," the central bank said in a statement. The note will bear the signature of Shaktikanta Das, Secretary in the Ministry of Finance. Rest other currency notes bear the signature of the RBI Governor. The numbering will be in black at right hand bottom portion of the note. On the reverse side, the year '2017' is mentioned. There is also representation of One Rupee coin with rupee symbol having floral design and the surrounding design consists of the picture of 'Sagar Samrat' the oil exploration platform. "The colour of One Rupee Currency Note shall be predominantly pink green on obverse and reverse in combination with others," the RBI said. (PTI)

New one rupee note to come out soon

The Public Accounts Committee (PAC) of the Indian Parliament headed by KV Thomas grilled the Governor of Reserve Bank of India on Friday. Highly placed sources confirmed to WION that when members asked Urjit Patel as to who took the decision for demonetisation, Urjit Patel chose to remain silent.&nbsp;

PAC also saw a&nbsp;heated debate between the opposition and ruling party members as some members said that committee meeting was on the state of the&nbsp;economy and not demonetisation per say. Sources also said that there were many questions on demonetisation on which Urjit Patel chose to remain silent or gave general answers.

The committee members also asked the RBI governor to look into cases of irregular deposits in the cooperative banks of which he took note of. Some members also requested the RBI that it must look into the issue of cess which is charged when a digital transaction takes place. The members were of the opinion that the current reprieve should continue till things normalise in the economic system.

Sources said that Patel will be called again for questioning as many questions remained answered. Both the PAC and the Standing Committee of Finance are looking into the issue of demonetisation. 
 
(WION)

Highly placed sources told WION that Urjit Patel chose to remain silent or gave generic replies to several questions

The Public Accounts Committee (PAC) of the Indian Parliament headed by KV Thomas grilled the Governor of Reserve Bank of India on Friday. Highly placed sources confirmed to WION that when members asked Urjit Patel as to who took the decision for demonetisation, Urjit Patel chose to remain silent. PAC also saw a heated debate between the opposition and ruling party members as some members said that committee meeting was on the state of the economy and not demonetisation per say. Sources also said that there were many questions on demonetisation on which Urjit Patel chose to remain silent or gave general answers. The committee members also asked the RBI governor to look into cases of irregular deposits in the cooperative banks of which he took note of. Some members also requested the RBI that it must look into the issue of cess which is charged when a digital transaction takes place. The members were of the opinion that the current reprieve should continue till things normalise in the economic system. Sources said that Patel will be called again for questioning as many questions remained answered. Both the PAC and the Standing Committee of Finance are looking into the issue of demonetisation. (WION)

India's central bank chief remains mum during demonetisation grilling

Supporting the letter written by the Reserve Bank of India (RBI) employees to Governor Urjit Patel protesting against operational &quot;mismanagement&quot; post demonetisation, Congress leader Kapil Sibal has said that the RBI was created to be independent of the government which has now been interfered during the drive.

&quot;RBI is created to be entirely independent of the government and this tradition is sought to be interfered with and I think that the feeling of the establishments are justified,&quot; Sibal told ANI.

Further commenting on the silence maintained by RBI governor over the same, Sibal said that the former may have done some things which require being silent.

In a letter, the employees said that the autonomy and image of RBI had been &quot;dented beyond repair&quot; due to mismanagement and termed the appointment of a senior Finance Ministry official for currency coordination as a &quot;blatant encroachment&quot; of the RBI`s exclusive turf.

In a strongly worded letter addressed to Reserve Bank of India (RBI) Governor Urjit Patel, the United Forum of Reserve Bank Officers and Employees have alleged that post the government&#39;s demonetisation move, the image of the Central bank has been dented beyond repair.

&quot;We request the Governor of the RBI, its highest functionary and protector of its autonomy and prestige, to do the needful urgently to do away with this unwarranted interference from the Finance Ministry and assure the staff accordingly as the staff feels humiliated,&quot; the letter added.

Various employee unions of the central bank have objected to the government &quot;impinging on RBI autonomy&quot; and have written to Patel to take action against the &quot;unwarranted interference&quot;.

Meanwhile, the Finance Ministry has clarified its stand stating that the Government fully respects the independence and autonomy of the Central Bank.

In a statement, the Ministry said that consultations between the Centre and the RBI are undertaken on various matters of public importance, wherever such consultation is mandated by law or has evolved as a practice. &quot;Consultations mandated by law or as evolved by practice should not be taken as infringement of autonomy of RBI,&quot; the statement added.

(ANI)&nbsp;

Referring to the letter written by RBI employees to the bank's Governor, Sibal said the feeling of the establishments was justified

Supporting the letter written by the Reserve Bank of India (RBI) employees to Governor Urjit Patel protesting against operational "mismanagement" post demonetisation, Congress leader Kapil Sibal has said that the RBI was created to be independent of the government which has now been interfered during the drive. "RBI is created to be entirely independent of the government and this tradition is sought to be interfered with and I think that the feeling of the establishments are justified," Sibal told ANI. Further commenting on the silence maintained by RBI governor over the same, Sibal said that the former may have done some things which require being silent. In a letter, the employees said that the autonomy and image of RBI had been "dented beyond repair" due to mismanagement and termed the appointment of a senior Finance Ministry official for currency coordination as a "blatant encroachment" of the RBI`s exclusive turf. In a strongly worded letter addressed to Reserve Bank of India (RBI) Governor Urjit Patel, the United Forum of Reserve Bank Officers and Employees have alleged that post the government's demonetisation move, the image of the Central bank has been dented beyond repair. "We request the Governor of the RBI, its highest functionary and protector of its autonomy and prestige, to do the needful urgently to do away with this unwarranted interference from the Finance Ministry and assure the staff accordingly as the staff feels humiliated," the letter added. Various employee unions of the central bank have objected to the government "impinging on RBI autonomy" and have written to Patel to take action against the "unwarranted interference". Meanwhile, the Finance Ministry has clarified its stand stating that the Government fully respects the independence and autonomy of the Central Bank. In a statement, the Ministry said that consultations between the Centre and the RBI are undertaken on various matters of public importance, wherever such consultation is mandated by law or has evolved as a practice. "Consultations mandated by law or as evolved by practice should not be taken as infringement of autonomy of RBI," the statement added. (ANI)

RBI was created to be independent of the Centre: Kapil Sibal

Urjit Patel, the governor of Reserve Bank of India -- the country&#39;s central banking institution, was under the cosh during his Kolkata trip on Thursday as Congress and&nbsp;Trinamool Congress supporters waved black flags and resorted to high-decibel sloganeering to mark their protest against demonetisation.

Black flags and chants of &#39;go back Urjit&#39; followed Patel wherever he went&nbsp;-- he was first greeted with derision by Trinamool Congress workers when he visited RBI&#39;s regional office in West Bengal&#39;s capital city of Kolkata and a few hours later, he was condemned to a similar behaviour when he reached the airport.

The Left in the city were in good numbers as well to rail against the government&#39;s decision to flush out old currency notes.

Patel was in India&#39;s eastern city of Kolkata to take stock of the situation in east and northeast India in the aftermath of the unprecedented and unexpected cash scrap.

In the morning, Patel reached RBI&#39;s Kolkata branch to convene a central board meeting much ahead of the scheduled time of 10 am and entered the building from the rear side&nbsp;to evade media spotlight. But supporters of Trinamool Congress, which enjoys formidable support in Bengal, had already massed outside the building to wave black flags and raise anti-establishment cries.

Patel subsequently met Trinamool chief and West Bengal chief minister Mamata Banerjee at 3.30 in the afternoon to discuss issues plaguing the banks in the state.

&quot;From Maharashtra to Gujarat, Uttar Pradesh to Bihar, Chennai to Kolkata I gave my views on behalf of the commoners. But after meeting him, I felt immensely satisfied as I got an opportunity to express my views before him,&quot; Banerjee later told a media gathering.

And when he reached the Kolkata International Airport, he was subjected to similar vitriol as Congress workers allegedly heckled him. The 53-year-old economist&nbsp;had to be escorted inside the airport by the police.

Both Trinamool Congress and the Congress have been vociferous opponets of the demonetisation policy.

(WION)

&nbsp;

Congress and?Trinamool Congress supporters waved black flags and resorted to high-decibel sloganeering to mark their protest

Urjit Patel, the governor of Reserve Bank of India -- the country's central banking institution, was under the cosh during his Kolkata trip on Thursday as Congress and Trinamool Congress supporters waved black flags and resorted to high-decibel sloganeering to mark their protest against demonetisation. Black flags and chants of 'go back Urjit' followed Patel wherever he went -- he was first greeted with derision by Trinamool Congress workers when he visited RBI's regional office in West Bengal's capital city of Kolkata and a few hours later, he was condemned to a similar behaviour when he reached the airport. The Left in the city were in good numbers as well to rail against the government's decision to flush out old currency notes. Patel was in India's eastern city of Kolkata to take stock of the situation in east and northeast India in the aftermath of the unprecedented and unexpected cash scrap. In the morning, Patel reached RBI's Kolkata branch to convene a central board meeting much ahead of the scheduled time of 10 am and entered the building from the rear side to evade media spotlight. But supporters of Trinamool Congress, which enjoys formidable support in Bengal, had already massed outside the building to wave black flags and raise anti-establishment cries. Patel subsequently met Trinamool chief and West Bengal chief minister Mamata Banerjee at 3.30 in the afternoon to discuss issues plaguing the banks in the state. "From Maharashtra to Gujarat, Uttar Pradesh to Bihar, Chennai to Kolkata I gave my views on behalf of the commoners. But after meeting him, I felt immensely satisfied as I got an opportunity to express my views before him," Banerjee later told a media gathering. And when he reached the Kolkata International Airport, he was subjected to similar vitriol as Congress workers allegedly heckled him. The 53-year-old economist had to be escorted inside the airport by the police. Both Trinamool Congress and the Congress have been vociferous opponets of the demonetisation policy. (WION)

Demonetisation: RBI governor heckled by Congress, Trinamool supporters in Kolkata

No decision has yet been reached to appoint India&#39;s next central bank governor, finance minister Arun Jaitley said today, 18 days before the incumbent is due to stand down. 
 
A senior aide to Indian Prime Minister Narendra Modi said he was &quot;expected to make up his mind very soon&quot; on replacing Raghuram Rajan, the former International Monetary Fund chief economist who dropped a bombshell in June by announcing he would not seek a second term. 
 
&quot;We will let you know when we decide,&quot; Jaitley told reporters as he returned to the finance ministry from a meeting with Modi. &quot;You will come to know the conclusion, not the process.&quot; 
 
Rajan ends his three-year term as governor of the Reserve Bank of India on September 4. 
 
In that short time, he transformed the RBI into an inflation-targeting central bank, with a central goal for consumer price growth of four per cent. The government is also in the process of selecting a new, six-member Monetary Policy Committee that will decide on interest rates. 
 
Officials have suggested that Rajan&#39;s replacement would be named soon to give enough time for an orderly leadership handover at the Mumbai-based central bank. 
 
A shortlist of possible successors was floated in the immediate aftermath of Rajan&#39;s June 18 announcement that, in the ensuing weeks, has seen hopefuls drift in and out of contention. 
 
Former RBI deputy governor Subir Gokarn, now India&#39;s executive director at the IMF, has featured throughout. Also in consideration is current deputy governor Urjit Patel, according to officials with direct knowledge of the matter. 
 
World Bank Chief Economist Kaushik Basu, who is soon to retire, has edged into contention. Other names also mentioned have been State Bank of India chair-managing director Arundhati Bhattacharya; the government&#39;s chief economic adviser Arvind Subramanian; and Ashok Lahiri, who held the same role under an earlier government. 
 
One finance ministry official said a decision was likely to be announced by the Prime Minister&#39;s Office, adding it was difficult to say at this stage whether Modi would accept Jaitley&#39;s recommendation at all. He declined to comment on what was discussed at the meeting between Modi and Jaitley. 
 
(Reuters)

Officials have suggested that Rajan's replacement would be named in time enough for an orderly leadership handover

No decision has yet been reached to appoint India's next central bank governor, finance minister Arun Jaitley said today, 18 days before the incumbent is due to stand down. A senior aide to Indian Prime Minister Narendra Modi said he was "expected to make up his mind very soon" on replacing Raghuram Rajan, the former International Monetary Fund chief economist who dropped a bombshell in June by announcing he would not seek a second term. "We will let you know when we decide," Jaitley told reporters as he returned to the finance ministry from a meeting with Modi. "You will come to know the conclusion, not the process." Rajan ends his three-year term as governor of the Reserve Bank of India on September 4. In that short time, he transformed the RBI into an inflation-targeting central bank, with a central goal for consumer price growth of four per cent. The government is also in the process of selecting a new, six-member Monetary Policy Committee that will decide on interest rates. Officials have suggested that Rajan's replacement would be named soon to give enough time for an orderly leadership handover at the Mumbai-based central bank. A shortlist of possible successors was floated in the immediate aftermath of Rajan's June 18 announcement that, in the ensuing weeks, has seen hopefuls drift in and out of contention. Former RBI deputy governor Subir Gokarn, now India's executive director at the IMF, has featured throughout. Also in consideration is current deputy governor Urjit Patel, according to officials with direct knowledge of the matter. World Bank Chief Economist Kaushik Basu, who is soon to retire, has edged into contention. Other names also mentioned have been State Bank of India chair-managing director Arundhati Bhattacharya; the government's chief economic adviser Arvind Subramanian; and Ashok Lahiri, who held the same role under an earlier government. One finance ministry official said a decision was likely to be announced by the Prime Minister's Office, adding it was difficult to say at this stage whether Modi would accept Jaitley's recommendation at all. He declined to comment on what was discussed at the meeting between Modi and Jaitley. (Reuters)

India finance minister: We'll let you know on RBI governor

Terming political attacks on him as abominable, outgoing Reserve Bank of India governor Raghuram Rajan today said he was open to staying a bit longer to complete the unfinished work of bank clean-up, but is perfectly happy to go. 
 
Rajan, who had in June decided against seeking a second term after 3-year tenure which ends next month, said the process of dialogue with the government did not reach a stage where he could have agreed to stay on. 
 
He said however that he was never worried about reappointment or a future career in government and did his best in the interest of the country and he was the &quot;best team player&quot;. 
 
Rajan, who plans to return to academia after his term ends on September 4, said his stays at university made him &quot;pretty thick skinned&quot;, but the attacks then were not abominable. 
 
&quot;Some of these (recent) attacks were abominable, that is imputing sort of motives, alleging things completely without any basis,&quot; he told CNBC-TV18, adding that he put them aside and did not pay any attention to them. 
 
Towards the end of his three-year tenure, Rajan faced personal attacks from BJP MP Subramanian Swamy who had alleged that the former IMF chief economist was not &quot;mentally not fully Indian&quot; and sent confidential and sensitive financial information abroad. 
 
Rajan said when people asked him if he was open to the second term, he said that although he had structured all his initiatives at RBI with a three-year horizon, there was some unfinished work like PSU banks&#39; balance sheet clean-up and setting up of monetary policy committee framework. 
 
&quot;That does not mean in any way, that I was absolutely hell bent on having a second term,&quot; he said. &quot;I was open for staying a little while longer to see them complete, but at the same time I was perfectly happy to go.&quot; 
 
Rajan said 90-95 per cent of the job that he had taken on was complete and he had absolute freedom in doing his work. 
 
On his future plans, he said: &quot;I have said again and again, I am fundamentally an academician. This (RBI Governor) is my side job&quot;.&nbsp; 
 
Asked if crony capitalists had a hand in his not getting an extension, Rajan said: &quot;I don&#39;t think you should attribute this to some hidden hand. I feel, I have done what was needed to be done, if they had such power they would have stopped me (from doing) what was needed.&quot; 
 
Stressing that he had absolute freedom in doing, whatever he wanted to do, Rajan said this required lots of work behind the scenes, with government and persuading government. 
 
&quot;So when people say you have been fighting all the time, absolutely not. Great relationship with previous government as well&nbsp;as people who matter in this government,&quot; he said. 
 
Rajan said legitimate criticism like focusing too much on inflation can be addressed and he has tried to convince public about his stand through his speeches. 
 
Stating that the country needs institutional reform to build a platform for strong and sustainable growth, Rajan cautioned against inflationary spiral in trying to push domestic demand-led growth. 
 
&quot;I keep saying, it is a no brainer to generate growth when the rest of the world is growing strong; when it is export-led growth, you don&#39;t need institutional change,&quot; he said. 
 
Stressing that RBI is an entity which has conservative approach as focuses on stability, Rajan said that in taking decisions he did not worry about his future career prospects. 
 
&quot;Wherever we had to say &#39;no&#39;, I have never worried about reappointment, or about whether I will have a future career in the government or anywhere else. I have said &#39;no&#39; when I think it is in the best interest of the country and I think in that way, I am being the best team player that I can possibly be. 
 
&quot;If I go along just for being comfortable, I think we will be building risk for the future which will really hurt the country,&quot; he said. 
Asked if his talking straight attitude went against him, Rajan said: &quot;I am not going to speculate, I think the bottom line is there was no consensus and that&#39;s where it stopped&quot;. 
 
He said after three-and-a-half years at IMF and four years in India, he did not want to label himself as a career bureaucrat, or a career technocrat. 
 
&quot;It is more where I can implement ideas, implement reform programme. This was absolutely a job I wanted to have, we worked together as a team in the RBI, we had a fantastic team and we made a&nbsp;great deal of difference. Did I come in with three years (in mind)? Yes absolutely... I am not saying I had in mind full stop at the end of it. But everything I wanted to do was structured for a three-year horizon,&quot; he said. 
 
(PTI)

Rajan, who decided against a second term, said dialogue with the government did not reach a stage where he could have agreed to stay on

Terming political attacks on him as abominable, outgoing Reserve Bank of India governor Raghuram Rajan today said he was open to staying a bit longer to complete the unfinished work of bank clean-up, but is perfectly happy to go. Rajan, who had in June decided against seeking a second term after 3-year tenure which ends next month, said the process of dialogue with the government did not reach a stage where he could have agreed to stay on. He said however that he was never worried about reappointment or a future career in government and did his best in the interest of the country and he was the "best team player". Rajan, who plans to return to academia after his term ends on September 4, said his stays at university made him "pretty thick skinned", but the attacks then were not abominable. "Some of these (recent) attacks were abominable, that is imputing sort of motives, alleging things completely without any basis," he told CNBC-TV18, adding that he put them aside and did not pay any attention to them. Towards the end of his three-year tenure, Rajan faced personal attacks from BJP MP Subramanian Swamy who had alleged that the former IMF chief economist was not "mentally not fully Indian" and sent confidential and sensitive financial information abroad. Rajan said when people asked him if he was open to the second term, he said that although he had structured all his initiatives at RBI with a three-year horizon, there was some unfinished work like PSU banks' balance sheet clean-up and setting up of monetary policy committee framework. "That does not mean in any way, that I was absolutely hell bent on having a second term," he said. "I was open for staying a little while longer to see them complete, but at the same time I was perfectly happy to go." Rajan said 90-95 per cent of the job that he had taken on was complete and he had absolute freedom in doing his work. On his future plans, he said: "I have said again and again, I am fundamentally an academician. This (RBI Governor) is my side job". Asked if crony capitalists had a hand in his not getting an extension, Rajan said: "I don't think you should attribute this to some hidden hand. I feel, I have done what was needed to be done, if they had such power they would have stopped me (from doing) what was needed." Stressing that he had absolute freedom in doing, whatever he wanted to do, Rajan said this required lots of work behind the scenes, with government and persuading government. "So when people say you have been fighting all the time, absolutely not. Great relationship with previous government as well as people who matter in this government," he said. Rajan said legitimate criticism like focusing too much on inflation can be addressed and he has tried to convince public about his stand through his speeches. Stating that the country needs institutional reform to build a platform for strong and sustainable growth, Rajan cautioned against inflationary spiral in trying to push domestic demand-led growth. "I keep saying, it is a no brainer to generate growth when the rest of the world is growing strong; when it is export-led growth, you don't need institutional change," he said. Stressing that RBI is an entity which has conservative approach as focuses on stability, Rajan said that in taking decisions he did not worry about his future career prospects. "Wherever we had to say 'no', I have never worried about reappointment, or about whether I will have a future career in the government or anywhere else. I have said 'no' when I think it is in the best interest of the country and I think in that way, I am being the best team player that I can possibly be. "If I go along just for being comfortable, I think we will be building risk for the future which will really hurt the country," he said. Asked if his talking straight attitude went against him, Rajan said: "I am not going to speculate, I think the bottom line is there was no consensus and that's where it stopped". He said after three-and-a-half years at IMF and four years in India, he did not want to label himself as a career bureaucrat, or a career technocrat. "It is more where I can implement ideas, implement reform programme. This was absolutely a job I wanted to have, we worked together as a team in the RBI, we had a fantastic team and we made a great deal of difference. Did I come in with three years (in mind)? Yes absolutely... I am not saying I had in mind full stop at the end of it. But everything I wanted to do was structured for a three-year horizon," he said. (PTI)

Rajan says he was open to extension, attacks on him were 'abominable'

The Reserve Bank of India (RB) left key policy rates unchanged, mostly on the back of rising inflation, which has been above the 5 per cent level in May and June, with eyes on the impact of the 7th Pay Commission payout and the monsoon. 
 
While the move was largely in line with the expectations put forth by experts, bankers and the markets, this was also RBI Governor Raghuram Rajan&#39;s last monetary policy review. Rajan will be stepping down from the RBI chair on September 4 when his term comes to an end. 
 
In the customary post-policy interaction with the media, Rajan, while answering the questions posed to him, left messages for the public, his critics and supporters, and talked about the RBI job and his future plans. 
 
On RBI job 
 
&quot;This has been a fantastic job. I have enjoyed every minute of it because everyday my RBI colleagues and I sit and work, we manage to move the needle a little bit everyday...there are very few places you can do this. So it has been fantastic. I hope there&#39;s some value add,&quot; he asserted.&nbsp; 
 
 
Advise to successor 
 
&quot;I don&#39;t advise my successors,&quot; Rajan said. 
 
Answering a question whether his successor will be pressurised to cut rates and sharply soon, the out-going Governor said, &quot;the next decision will be made by the monetary policy committee. There will be six people deciding the interest rates path. So it will be an independent decision.&quot; 
 
To his critics and supporters 
 
&quot;I have nothing to say to my critics. At the end of the day (what matters is) do you feel like you have made a useful contribution, are some people are better because of it? There are times I get notes in a plane saying thank you for what you&#39;re doing,&quot; he said. 
 
&quot;The snap judgements by critics or supporters don&#39;t matter. What matters is what plays out the long run -- sustainable growth of the country, job creation, movement to middle income economy,&quot; Rajan added. 
 
Rajan&#39;s message to the public 
 
The RBI will be rolling out a &#39;public awareness and consumer protection campaign&#39; very soon. Highlighting the campaign, Rajan said that there are two main pain points for bank customers and banks
<ul>
	<li>Meeting Know Your Customer (KYC) rules:&nbsp;Rajan said, while the KYC rules have been largely simplified, there may be instances that the local bank branch may not be aware of the changes made by the RBI. To simplify this, the RBI has added a FAQ (Frequently Asked Questions) tab on its website on the morning of August 9, to intimate the customer and the bank branches of the changes made to KYC norms.This includes all the guidelines currently in place to fulfil the KYC norms needed to open and maintain a bank account. A complete list of 24 questions with further links, have been provided by the central bank.</li>
</ul>
While speaking at the conference, Rajan said, according to the revised KYC norms, it&#39;s not necessary to physically go to the bank to get your address changed if you move houses. Your new address can be self certified but the bank branch may not be aware. You can show them the KYC guidelines of RBI&#39;s website, he said.

<ul>
	<li>Rajan&#39;s second warning on fraudulent e-mails in his name:&nbsp;The outgoing RBI chief warned the public about responding or paying service fees to e-mails (or senders) that are sent in his name or any future RBI Governor&#39;s name, promising a huge sum of money, in exchange of a small fee. &quot;Delete the email,&quot; he said, &quot;the e-mails are not from me, and RBI doesn&#39;t give out money to ordinary citizens even though we print plenty of it.&quot;</li>
</ul>
 
On NPA 
 
&quot;I&#39;m comfortable with the recognition process (towards NPA). The banks have taken a lot of steps (to address NPAs), some of them have taken more than required steps. The culture of clean up is embedded and so is the culture of recovery,&quot; he was quoted as saying.&nbsp; 
 
In the future, even after he steps down, Rajan said he was confident there will be no backtracking on NPA. &quot;There has been cooperation all along the way between the government and the RBI. The banks know what needs to be done,&quot; he said. 
 
On impact of GST and 7th Pay Commission 
 
&quot;It is not wise to assume that Goods and Services Tax (GST) implementation will increase inflation. What&#39;s important, is to see whether the impact of the GST implementation will be long term or short term.&quot;&nbsp; 
 
In terms of the 7th pay commission payout, the housing allowance maybe into prices over time but it may be a one time thing, he summed up.&nbsp; 
 
It&#39;s pertinent to mention that salaries for central government employees and pensioners for the years 2016 to 2026 is based on the recommendations of 7th pay commission that comprised a four-member panel and took 21 months to prepare the report.&nbsp; 
 
(This report first appeared in DNA) 
 
 
&nbsp;

Raghuram Rajan, who steps down on September 4, also left messages for critics and supporters and talked about the RBI job after the meet

The Reserve Bank of India (RB) left key policy rates unchanged, mostly on the back of rising inflation, which has been above the 5 per cent level in May and June, with eyes on the impact of the 7th Pay Commission payout and the monsoon. While the move was largely in line with the expectations put forth by experts, bankers and the markets, this was also RBI Governor Raghuram Rajan's last monetary policy review. Rajan will be stepping down from the RBI chair on September 4 when his term comes to an end. In the customary post-policy interaction with the media, Rajan, while answering the questions posed to him, left messages for the public, his critics and supporters, and talked about the RBI job and his future plans. On RBI job "This has been a fantastic job. I have enjoyed every minute of it because everyday my RBI colleagues and I sit and work, we manage to move the needle a little bit everyday...there are very few places you can do this. So it has been fantastic. I hope there's some value add," he asserted. Advise to successor "I don't advise my successors," Rajan said. Answering a question whether his successor will be pressurised to cut rates and sharply soon, the out-going Governor said, "the next decision will be made by the monetary policy committee. There will be six people deciding the interest rates path. So it will be an independent decision." To his critics and supporters "I have nothing to say to my critics. At the end of the day (what matters is) do you feel like you have made a useful contribution, are some people are better because of it? There are times I get notes in a plane saying thank you for what you're doing," he said. "The snap judgements by critics or supporters don't matter. What matters is what plays out the long run -- sustainable growth of the country, job creation, movement to middle income economy," Rajan added. Rajan's message to the public The RBI will be rolling out a 'public awareness and consumer protection campaign' very soon. Highlighting the campaign, Rajan said that there are two main pain points for bank customers and banks Meeting Know Your Customer (KYC) rules: Rajan said, while the KYC rules have been largely simplified, there may be instances that the local bank branch may not be aware of the changes made by the RBI. To simplify this, the RBI has added a FAQ (Frequently Asked Questions) tab on its website on the morning of August 9, to intimate the customer and the bank branches of the changes made to KYC norms.This includes all the guidelines currently in place to fulfil the KYC norms needed to open and maintain a bank account. A complete list of 24 questions with further links, have been provided by the central bank. While speaking at the conference, Rajan said, according to the revised KYC norms, it's not necessary to physically go to the bank to get your address changed if you move houses. Your new address can be self certified but the bank branch may not be aware. You can show them the KYC guidelines of RBI's website, he said. Rajan's second warning on fraudulent e-mails in his name: The outgoing RBI chief warned the public about responding or paying service fees to e-mails (or senders) that are sent in his name or any future RBI Governor's name, promising a huge sum of money, in exchange of a small fee. "Delete the email," he said, "the e-mails are not from me, and RBI doesn't give out money to ordinary citizens even though we print plenty of it." On NPA "I'm comfortable with the recognition process (towards NPA). The banks have taken a lot of steps (to address NPAs), some of them have taken more than required steps. The culture of clean up is embedded and so is the culture of recovery," he was quoted as saying. In the future, even after he steps down, Rajan said he was confident there will be no backtracking on NPA. "There has been cooperation all along the way between the government and the RBI. The banks know what needs to be done," he said. On impact of GST and 7th Pay Commission "It is not wise to assume that Goods and Services Tax (GST) implementation will increase inflation. What's important, is to see whether the impact of the GST implementation will be long term or short term." In terms of the 7th pay commission payout, the housing allowance maybe into prices over time but it may be a one time thing, he summed up. It's pertinent to mention that salaries for central government employees and pensioners for the years 2016 to 2026 is based on the recommendations of 7th pay commission that comprised a four-member panel and took 21 months to prepare the report. (This report first appeared in DNA)

Outgoing RBI chief keeps policy rate unchanged at last review meet; talks about GST, 7th pay commission

Rupee slipped to its weakest in nearly a month, while stocks fell and bond yields rose after Reserve Bank of India&#39;s (RBI) governor Raghuram Rajan&#39;s surprise announcement over the weekend that he would quit after his term ends in September. 
 
The central bank was spotted selling dollars to curb the fall in the local currency, three traders said. 
 
The rupee in India was trading at 67.47 to the dollar at 0404 GMT, after hitting 67.70 to the dollar, its weakest since May 24. The currency had closed at 67.08/67.09 to the dollar on Friday. 
 
Rajan&#39;s unexpected decision comes at a time when investors had been bracing for heavy volatility from global markets as Britain is due to vote on Thursday on whether to leave the European Union. 
 
Though analysts had speculated Rajan could decide not to pursue a second term after a major regional newspaper reported last month he did not want to remain at the central bank, few had foreseen an announcement would come in the form of a letter to staff. 
 
The focus will now shift to Rajan&#39;s successor and analysts said they did not expect any long-term impact to markets as long as his replacement is seen as credible and somebody who can defend the central bank&#39;s autonomy at a critical juncture in its history. 
 
&quot;If you were to see someone come in who has very different set of policies, then the market will question if something has changed. That would not be my base case. If that were to happen, that would make me reassess how we thought about India,&quot; said Josh Crabb, head of Asian equities at Old Mutual Global Investors in Hong Kong with $37.3 billion under management. 
 
&quot;If the system shows a willingness, a continuation of those policies, irrespective of the individual involved, that&rsquo;s quite a large vote of confidence.&quot; 
 
Rajan, a former International Monetary Fund chief economist, has been popular with foreign investors for his efforts to tackle inflation and helping to rescue India from its worst crisis in more than two decades when he took the helm in 2013. 
 
The benchmark 10-year bond yield was up 3 basis points to 7.53 per cent. 
 
The one-year OIS rate was bid at 6.71-6.73 per cent while the five-year OIS rate was bid at 6.84 per cent, traders said. The one-year swap closed at 6.68 per cent and five-year at 6.77 per cent on Friday. 
 
The National Stock Exchange of India (Nifty) was flat after falling as much as 0.77 per cent. 
(Reuters)

The rupee fell to its lowest in nearly a month

Rupee slipped to its weakest in nearly a month, while stocks fell and bond yields rose after Reserve Bank of India's (RBI) governor Raghuram Rajan's surprise announcement over the weekend that he would quit after his term ends in September. The central bank was spotted selling dollars to curb the fall in the local currency, three traders said. The rupee in India was trading at 67.47 to the dollar at 0404 GMT, after hitting 67.70 to the dollar, its weakest since May 24. The currency had closed at 67.08/67.09 to the dollar on Friday. Rajan's unexpected decision comes at a time when investors had been bracing for heavy volatility from global markets as Britain is due to vote on Thursday on whether to leave the European Union. Though analysts had speculated Rajan could decide not to pursue a second term after a major regional newspaper reported last month he did not want to remain at the central bank, few had foreseen an announcement would come in the form of a letter to staff. The focus will now shift to Rajan's successor and analysts said they did not expect any long-term impact to markets as long as his replacement is seen as credible and somebody who can defend the central bank's autonomy at a critical juncture in its history. "If you were to see someone come in who has very different set of policies, then the market will question if something has changed. That would not be my base case. If that were to happen, that would make me reassess how we thought about India," said Josh Crabb, head of Asian equities at Old Mutual Global Investors in Hong Kong with $37.3 billion under management. "If the system shows a willingness, a continuation of those policies, irrespective of the individual involved, that’s quite a large vote of confidence." Rajan, a former International Monetary Fund chief economist, has been popular with foreign investors for his efforts to tackle inflation and helping to rescue India from its worst crisis in more than two decades when he took the helm in 2013. The benchmark 10-year bond yield was up 3 basis points to 7.53 per cent. The one-year OIS rate was bid at 6.71-6.73 per cent while the five-year OIS rate was bid at 6.84 per cent, traders said. The one-year swap closed at 6.68 per cent and five-year at 6.77 per cent on Friday. The National Stock Exchange of India (Nifty) was flat after falling as much as 0.77 per cent. (Reuters)

Rajan leaves surprisingly and unsurprisingly the rupee and markets fall

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