RBI Governor Urjit Patel with RBI Executive Director M D Patra at a press conference in Mumbai after the monetary policy review meeting (Photographer: Shashank Parade/PTI) 

RBI Governor To Submit Written Answers To Questions Raised By MPs

Reserve Bank of India Governor Urjit Patel on Tuesday committed to a parliamentary committee to give in writing his views on some of the controversial issues. These may include the government citing the never-used powers to get the central bank on the discussion table, said sources.

Patel, who appeared before the 31-member Parliamentary Standing Committee on Finance, said the economy would get a boost from oil prices cooling off from four-year highs and fundamentals were “robust”, according to sources.

The RBI governor also told the Members of Parliament that credit growth was 15 percent and the impact of demonetisation has a transient impact on the economy. Patel was earlier scheduled to appear before the panel on Nov. 12.

He, however, did not answer specific questions on the government invoking Section 7 of the RBI Act, non-performing assets, the autonomy of the central bank and other contentious issues, sources said.

Patel made a presentation about the state of the economy as well as about the world economy to the committee, and several members asked questions. His views on the economy were “optimistic”, sources said.

He, they said, stayed clear of controversial questions like the government invoking special powers, instead he gave intelligent replies without saying anything.

Members also asked questions on the implementation of the Basel-III capital adequacy norms for banks. To this, a source said the governor replied that adherence to the global norms was India’s commitment to G-20 nations.

Another source said as there were many questions, the governor was asked to file written replies in 10-15 days.

Also read: India Is Said to Push RBI to Lift Lending Curb on Some Banks

The RBI governor appeared before the panel days after the RBI’s face-off with the Finance Ministry over issues ranging from the appropriate size of reserves to be maintained by the central bank to easing of lending norms for small and medium enterprises.

Former Prime Minister Manmohan Singh is also a member of the committee headed by senior Congress leader and former Union minister M Veerappa Moily.

India’s banking system, particularly state-owned banks, are grappling with huge bad loans. Recently, there has been a liquidity crisis among non-bank lenders following payment defaults by IL&FS Ltd.

Also read: RBI Governor Urjit Patel Appears Before Parliamentary Standing Committee On Finance