The Reserve Bank of India (RBI) logo is displayed on the bank’s building in Mumbai, India. (Photographer: Adeel Halim/Bloomberg)

RBI’s Dec. 14 Board Meet Stands For Now, Says Economic Affairs Secretary

Economic Affairs Secretary Subhash Chandra Garg on Tuesday said the Dec. 14 Reserve Bank of India’s board meeting stands and there has been no change in the schedule so far.

There were confusion over the fate of Dec. 14 central board meeting of the RBI following abrupt resignation of Urjit Patel as Governor of the central bank on Monday.

Acting swiftly, the government Tuesday appointed former Economic Affairs Secretary Shaktikanta Das as the 25th Governor of the Reserve Bank of India.

The crucial board meeting is expected to see discussion on various issues including governance reforms at the RBI.

"The Dec. 14 meeting stands as of now. If RBI decides otherwise, we will get to know," Garg told reporters in New Delhi.

For the 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.

The friction between the RBI and the finance ministry was attributed to the recalcitrance of Patel, who appeared keen to be seen as a defiant, independent-minded governor of high credibility by resisting the government's call for increased transparency on the central bank's reserves (just how much is necessary for stability operations) and for enhanced liquidity so that credit can be eased to money-strapped sectors especially MSMEs.

The government cited Section 7 of the RBI Act - a never-used-provision - to ask governor to discuss the contentious issues. The government wanted greater oversight on RBI's functioning and a review of its economic capital framework.

Also read: Urjit Patel: A RBI Governor Most Controversial