SME Times is powered by   
Search News
Just in:   • Cyclone Idai: Unicef urges assistance to children  • Israeli army targets two Hamas posts in Gaza Strip  • Petrol prices rise, diesel remains unchanged  • PNB sets recovery target of Rs 10K cr for Q4: MD  • ADB readies for face-off with AIIB, NDB in India 
Last updated: 21 Nov, 2018  

RBI.9.Thmb.jpg Good news: RBI-Centre conflict cools down

   Top Stories
» NITI Aayog to organise FinTech conclave Monday
» 'Revised fiscal deficit target due to cut in non-essential expenditure'
» Prevent degradation of ocean and its ecosystem: Naidu
» CITI welcomes new textile policy
» Support needed urgently for export sector: Gupta
Bikky Khosla | 20 Nov, 2018

Finally the ice is broken and we can now heave a sigh of relief as the tension between the government and the RBI eased, with the two sides finding a somewhat middle ground on some contentious issues in a much-awaited board meeting that began on Monday. Amid media reports portraying the differences as a face-off and even as attempts by the Centre to undermine the independence of the central bank, it was widely expected that the confrontation will escalate further, but fortunately it didn’t happen.

The RBI has now agreed to inject Rs 8,000 crore into the market by purchasing government securities on November 22. In a statement after the meeting, the central bank said that the decision was based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward. Additionally, in a positive development for the micro, small and medium enterprises (MSMEs), the board zeroed in on a new scheme for the sector, which will now allow loans up to Rs 25 crore.

But some contentious issue are yet to be addressed to the satisfaction of the union government. The government is of the belief that NBFCs are facing an acute liquidity crisis, which in turn, is impacting the real estate sector and small businesses. Now, the matter has been deferred to the December 14 meeting of the central bank. Similarly, the issue of transfer of excess RBI reserves to the central government is now to be transferred to an expert committee.

However, with latest developments, the threat of invoking Section 7 of the RBI Act, 1934 seems to have passed. It would have brought the relationship to a new low. There is nothing new in the fact that the government wants a 'politically correct' monetary policy while the RBI places emphasis on objectives that are often different from the political view, but what is most important is that none of them should lose sight of the common goal of growth with equity.

I invite your opinions.

Print the Page
Add to Favorite
Share this on :

Please comment on this story:
Subject :
(Maximum 1500 characters)  Characters left 1500
Your name:

  Customs Exchange Rates
Currency Import Export
US Dollar
UK Pound
Japanese Yen 58.85 56.85
As on 25 Mar, 2019
  Daily Poll
Is counterfeiting a major threat to SMEs?
 Can't say
  Commented Stories
» Starting an import export business: Basic guide for beginners(2)
About Us  |   Advertise with Us  
  Useful Links  |   Terms and Conditions  |   Disclaimer  |   Contact Us  
Follow Us : Facebook Twitter