Not dissatisfied with RBI, says Arun Jaitley

NEW DELHI: Finance minister Arun Jaitley on Friday answered in adverse to a question whether the federal government was not satisfied with the functioning of the RBI. In a written reply to the Lok Sabha, the minister quoted a report of IMF, which mentioned supervision and law through central financial institution was robust and advanced in recent times.

“No, madam,” Jaitley mentioned to a question whether the federal government is not satisfied concerning the functioning of the RBI. The government and the RBI beneath the former governor Urjit Patel were at loggerheads on several problems, including over suitable dimension of reserves which the central financial institution should hold.

There were also differences over the lending to the small and medium enterprises, and norms relating to supervisory motion over public sector banks beneath PCA of the RBI. The differences reached a flash level with Patel quitting on December 10.

Urjit Patel quits RBI: The 'vigilant owl' flies out amid differences with government

At the peak of an excessively ugly public spat between the RBI and the Centre, industrialist Rahul Bajaj, who has a historical past of not mincing his phrases, recommended RBI governor Urjit Patel for appearing the "spine".

Patel’s resignation was being speculated from the time the federal government cited a never-before-used provision of RBI Act to get him to imagine its perspectives on relaxing lending norms for segments similar to SMEs, suitable dimension of reserves RBI must deal with and easing norms for susceptible banks.