Urjit Patel may resign as Jaitley’s remarks widen RBI-govt rift

Govt Sends Letters to RBI Invoking Section 7 of RBI Act: Reports

Reports suggest that the Centre has sent letters to the RBI invoking Section 7 of the RBI Act on Wednesday, 31 October, allowing it to issue directions to the central bank governor on matters of public interest. What's interesting is that the following Section of the RBI Act has never been used by any government post the independence of India.

"RBI governor may even consider resigning".

Among other recommendations CII has suggested that RBI must encourage non banking finance companies (NBFCs) to securitize their assets which can be purchased by banks. The folloiwng can also be used by the government to push their agendas via Central Bank. This action, and Redrado's resignation, led to a reassessment of Argentina's sovereign risk, meaning the market made it much more expensive for the government to borrow money and ended up sparking a constitutional crisis. With the two giants managing the Indian economy - the Central government and the Reserve Bank of India - at loggerheads with each other, it is the economy that is under stress.

Although the government has issued a press statement on Wednesday afternoon in a bid to clarify controversy surrounding invocation of section 7, sources said the tussle has been going on for quite some time and it all started with "forced demonetisation" by the government in 2016.

OnePlus 6T Pricing, Colours And Storage Size Leak
Coming to what's new with the OnePlus 6T , the device will not have a physical fingerprint reader. To discover it fully, it will still wait for the 29th October and its presentation in NY .

Rajya Sabha MP Subramanian Swamy showed his support for Patel and tweeted: "If RBI governor resigns then it is a direct outcome of FM blaming him publicly yesterday for NPAs".

A government's horizon of decision-making is rendered short, like the duration of a T20 match (to use a cricketing analogy), by several considerations. As elections approach, delivering on proclaimed manifestos of the past acquires urgency; where manifestos can not be delivered upon, populist alternatives need to be arranged with immediacy.

The rift between the RBI and the government has 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. Unsurprisingly, central banks strive to build credibility through a series of hard choices that reflect sacrificing short-term gains for long-term outcomes such as price or financial stability.

The issues that have cropped up between the RBI and the government range from banking regulation to payment systems and the central bank balancesheet. In contrast, a central bank plays a test match, trying to win each session but, importantly, also survive it so as to have a chance to win the next session, Acharya had said. Bond yields and prices move in opposite directions.

Related news:

Hot News

isis-killer-beheading-video-story-top Meghan Markle's Speech In New Zealand Broke A Strict Royal Rule
Oct 29, 2018 - 19:41
She ended her speech with a phrase from Kate Sheppard, the most prominent member of the women's suffrage movement in New Zealand. On Twitter " Meghan " featured high on the list of trending topics - just below the local version of Married at First Sight.

isis-killer-beheading-video-story-top NOAA: Sub-Tropical Storm Oscar Projected Path, Spaghetti Models
Oct 29, 2018 - 18:45
Hurricane Oscar has gained a little strength, but forecasters say the storm is curving away from land over the Atlantic Ocean. The system is expected to move generally northward during the next couple of days, according to the forecast.

isis-killer-beheading-video-story-top Jamal Khashoggi's son leaves Saudi Arabia, US praises decision
Oct 29, 2018 - 18:35
Saudi Arabia denied any knowledge of Khashoggi's fate for more than two weeks, before claiming he was killed accidentally in a fight at the consulate.

isis-killer-beheading-video-story-top Merkel, Germany’s ‘eternal’ chancellor, embarks on last lap
Oct 29, 2018 - 15:32
A new CDU chair will be elected at the upcoming party conference in December, Deutsche Welle said. The result, the SPD's worst since 1946, will pile pressure on the party leader, Andrea Nahles.

isis-killer-beheading-video-story-top Saudi Arabia official: Reaction to Khashoggi killing is 'fairly hysterical'
Oct 28, 2018 - 17:15
He repeatedly reassured Khashoggi, say multiple sources, he had nothing to fear by going back home. It also said they were accused of murder by "premeditation, monstrous intent or by torture".

isis-killer-beheading-video-story-top Celtic without five key players for Red Bull Leipzig clash
Oct 28, 2018 - 16:32
Cristian Gamboa, Jozo Simunovic, Eboue Kouassi, Ryan Christie and Lewis Morgan all came in, the latter making his first start. We know if we're going to have any aspirations of coming out of the group then it's a game we have to win".

isis-killer-beheading-video-story-top Facebook Ad Report Puts Beto O'Rourke as Top Spender, After Facebook
Oct 28, 2018 - 16:02
As first reported by The Houston Chronicle , O'Rourke has raised $70.4 million since entering the race in March 2017. The newly-released data shows that United States dollars 256.4 million was spent on political ads since May.

isis-killer-beheading-video-story-top Rays assistant coach Rocco Baldelli reportedly hired to be new Twins manager
Oct 28, 2018 - 16:00
The move came as a surprise, in part because Molitor was less than a year removed from winning the Manager of the Year Award. Minnesota went 78-84 in 2018, finishing second in the American League Central but 13 games behind the Cleveland Indians.

isis-killer-beheading-video-story-top David Beckham spotted in crowd as Harry and Meghan attend Invictus event
Oct 28, 2018 - 15:16
She ended her speech with a phrase from Kate Sheppard, the most prominent member of the women's suffrage movement in New Zealand . In the audio recording, the former actress said she had a clear idea of what she wanted to wear from the start.

isis-killer-beheading-video-story-top Horner surprised Renault is letting issues happen on Daniel Ricciardo's auto
Oct 27, 2018 - 05:56
Ricciardo was sitting in fourth on the ninth lap of the race when his vehicle conked out on him - his fifth DNF in 10 races. He doesn't blame the team in any way, he knows we are doing everything we can, it's just one of those things, ' he said.

isis-killer-beheading-video-story-top Wolves show 'no inclination to move' on Rockets' offer for Butler
Oct 27, 2018 - 05:42
They did bring in Carmelo Anthony , but Butler would obviously a massive improvement over any of those players. However, rules when it comes to protecting picks in this situation are tricky.

isis-killer-beheading-video-story-top Jeff Bezos Loses $14 Billion as Amazon Stock Plunges
Oct 27, 2018 - 04:00
Global net sales came to $15.55 billion, up 13 percent, with an operating loss of $494 385 million. In the previous quarter, the annual rate was a brisk 4.2 percent, the best in almost four years.

isis-killer-beheading-video-story-top Virat Kohli becomes fastest batsman to reach 10000 ODI runs
Oct 27, 2018 - 03:44
Shai Hope, who nearly earned the win for West Indies with an unbeaten 123, was crestfallen after failing to cross the line. The Trinidadian said his decision was also based on a desire to vacate the field for younger talent in the national team.

isis-killer-beheading-video-story-top Mookie Betts Fed the Homeless After Game 2 of the World Series
Oct 27, 2018 - 03:10
The manager said Martinez would get more treatment Friday, and a decision would be made as game time approached. It's Andrew Benintendi who takes a seat - at least at the start of World Series Game 3 - for the Red Sox .

isis-killer-beheading-video-story-top Megyn Kelly won’t return to NBC after defending ‘blackface’ costumes
Oct 27, 2018 - 01:01
The network on Friday again aired a repeat of " Megyn Kelly Today " just as it did Thursday following this week's controversy. Al Roker and Craig Melvin strongly criticized Kelly's comments during the 7 a.m. hour of " Today " on Wednesday.