RBI vs govt: Crisis averted for now, all eyes on Urjit Patel’s November 19 board meet


MUMBAI: With moves afoot by the government to defuse tensions with the central bank RBI governor Urjit Patel has called a meeting of its board on November 19. The development indicates that the likelihood of Patel resigning, at least in the next fortnight, has reduced.The agenda for the board meet is understood to be the same that was set for the previous one last week, which ended in a stalemate. According to sources, the issues discussed were the ones on which the government had begun a consultative process under Section 7 of the RBI Act, 1934. This section empowers the government to issue directions should consultations fail. In the last 30 days, the Centre is understood to have sent communications to the RBI on three issues — allowing banks under prompt corrective action to lend to small businesses, issuing a special dispensation for loans in the power sector and to improve liquidity in the system. The stance of the government-appointed directors is likely to determine Patel’s future course of action.


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