News Analysis India

Tag: Reserve Bank

  • Bid to weaken coop movement and give reins to select people, says Sharad Pawar as he slams RBI

    By PTI

    PUNE: NCP chief Sharad Pawar on Tuesday criticised policies of the Reserve Bank towards cooperative banks, saying an attempt is made to “weaken” the cooperative movement by handing over the reins of the sector to a specific set of people.

    Maharashtra has a strong network of cooperative bodies, which also forms a support base for the NCP and Congress who share power with Shiv Sena in the Maha Vikas Aghadi government.

    “It seems the policy of the RBI is to gradually bring down the number of cooperative banks, which help the common man in difficult times and close them down, merging them with other banks. All this is not only detrimental to the cooperative movement but is also dangerous for the common man,” Pawar told reporters.

    The veteran politician said the “perspective” of the top bank towards cooperative banks is “not at all appropriate”.

    The Nationalist Congress Party has been opposing the supervision of cooperative banks by the RBI since the changes were made to The Banking Regulation Act approved by Parliament in September 2020.

    As per the amended law, the RBI can supersede the board of directors of cooperative banks after consultations with the concerned state government.

    Pawar said it is the right of members of a cooperative institution to decide to whom the reins of the bank should be given, who should be appointed as director and if the performance of that director is not up to the mark, remove him.

    “But now the RBI is saying that they will appoint the person irrespective of whether he is a member of the institution or not…so there is an attempt to slowly weaken the cooperative movement by handing over the reins of the cooperative sector in the hands of some specific set of people,” he added.

    The Modi government recently carved out the Ministry of Cooperation, which is headed by Union Home Minister Amit Shah.

    Pawar had earlier said the co-operative societies fall in the purview of the state government, and the Central government cannot interfere.

    Speaking about the 97th Amendment, which dealt with issues related to the effective management of cooperative societies, Pawar on Tuesday said it was he who had tabled the amendment when he was a minister.

    “I had tabled the amendment following detailed deliberations and meetings with cooperatives ministers from the state and chiefs of cooperative institutions. The important part of the 97th amendment was that it brought limitations on state governments’ unnecessary intervention into these institutions,” the former Union agriculture minister said.

    He said a formula was decided in the 97th amendment about the extent to which a state government can intervene in the cooperative institution.

    “In a nutshell, cooperative banks were given some sort of protection. Unfortunately, talks are going on to bring changes to that. Though it is not being done yet, we endeavour to approach the people who are at the helm and present the facts to steer these banks away from the crisis,” he said.

  • Mamata accuses BJP of destroying institutions

    Continuing her tirade against the BJP-led NDA Government for “taking India towards a political chaos,” Bengal Chief Minister Mamata Banerjee on Friday said the saffron Government had ensured that the key institutions of the country were destroyed.

    In an apparent bid to catch the bull by its horn the Chief Minister also announced counter-Yatras in the wake of BJP’s much publicised Rath Yatras beginning next month. The TMC Yatras will follow the route of the BJP Yatras, she said.

    The Narendra Modi Government was tearing down the major institutions like Reserve Bank of India and Central Bureau of Investigation Banerjee said promising to do everything to protect these organizations.

    “They (Modi Government) are destroying all the key institutions of the country,” Banerjee who had earlier been critical of changing the Planning Commission into Niti Ayog said adding how the Centre was “trying to change the way the RBI and the CBI function.”

    The ruling outfit (read BJP) that was making “‘building statues’ its poll agenda will itself become a statue after the coming Lok Sabha elections,” Banerjee told a party meeting in Kolkata.

    Dropping hints that the Trinamool Congress was planning to take central stage in Delhi post 2019 general elections, Banerjee said the way the BJP was trying to divide the country and implementing regimes like the National Register for Citizens would force her party to “play a bigger role in the coming days.

    “We will not tolerate division in the society and persecution of innocent people in the name of NRC,” Banerjee said giving a call for “BJP Hatao Desh Bachao (save India by driving away the BJP)”.

    The Chief Minister who had called a mega rally in January to be held at the historic Brigade Parade Ground in Kolkata where she had invited all the anti-BJP parties said “all parties barring a few have confirmed their desire to attend the rally,” adding the same will act as the final nail in the BJP’s coffin.

    Attacking the saffron outfit for reintroducing the age-old tactic of Rath Yatras to polarize the Hindu vote, Banerjee said, “the BJP is organizing the Rath Yatra to divide the people but we will organize similar Yatras which will be called “Ekta Yatra (Unity Rally)” on the same route that their Yatra follows.”

    The Trinamool Congress’ Yatra “is aimed at uniting and not dividing the communities,” Banerjee said.

    Incidentally the CPI(M) which was locked in a battle with the BJP for the second place in the State has also announced rallies following the same path that the BJP’s Yatra is like to take.

    The BJP is scheduled to take out three Yatras in December. While the first Yatra will start from Ganga Sagar (the southernmost tip of Bengal), the second one will commence from Tarapeeth in Birbhum district. The third Yatra will start from the northern most district o the State Coochbehar bordering Assam. The BJP’s chariots will converge at the Brigade Parade Ground in Kolkata on January 23 the birth day of Netaji Subhas Chandra Bose, the party sources said.

    Enroute the Yatras will cover several thousand kilometers, during which 60 mass meetings will be held.

    Top BJP leaders including party president Amit Shah, Assam Chief Minister Sarwananda Sonowal and his UP counterpart Yogi Adityanath will address the BJP rallies sources said.

    “The Yatras will be taken out against Trinamool Congress’ reign of terror, its appeasement policy and its aiding the continuing infiltration through Bangladesh border,” BJP State Rahul Sinha said.

    However TMC MP and Chief Minister’s nephew said the Rath Yatra would in fact be a “luxury tour of the State in air-conditioned vehicles by the BJP leaders.”

  • Autonomy of RBI essential, nurtured by govt: FinMin

    Amid reports of its mounting tension with the RBI, the Finance Ministry Wednesday said the government has “nurtured and respected” autonomy of the central bank and has been holding extensive consultations with it on many issues.

    “The autonomy for the central bank, within the framework of the RBI Act, is an essential and accepted governance requirement. Government of India has nurtured and respected this,” it said in a statement.

    Both the government and RBI, in their functioning, have to be guided by public interest and the requirement of the Indian economy, it said. “For the purpose, extensive consultations on several issues take place between the government and the RBI from time to time.”

    However, the statement did not mention about the  government citing the never-before-used power of issuing directions under the Act to RBI Governor to seek a resolution to differences with the central bank.

    The government has sent at least three letters on different issues under Section 7 (1) of the Reserve Bank of India Act that gives it powers to issue any direction to the central bank governor on matters of public interest.

    “The government of India has never made public the subject matter of those consultations. Only the final decisions taken are communicated,” the statement said.

    “The government, through these consultations, places its assessment on issues and suggests possible solutions. The government will continue to do so,” it added.

  • RBI looked the other way when banks lent freely, ran up NPAs: Jaitley

    Finance Minister Arun Jaitley on Tuesday held the central bank responsible for the mountain of bad loans, saying the Reserve Bank looked the other way when banks lent indiscriminately during 2008-14 to keep the economy humming.

    Jaitley’s comments reflect a growing tension between the RBI and the government, days after the central bank Deputy Governor Viral Acharya made a bold pitch for autonomy and independence in the banking regulator’s functioning.

    The Finance Minister said that after the global financial crisis in 2008 and until 2014, banks were told to open their doors and lend indiscriminately to keep the economy going “artificially”.

    “The central bank looked the other way (when) there was indiscriminate lending… Total bank credit in India from Rs 18 lakh crore in 2008 went up to Rs 55 lakh crore by 2014. And this was something that banks couldn’t sustain, the borrowers couldn’t sustain and you had the NPA problem,” Jaitley said at an event.

    “I am suprised that at that time, the government looked the other way, the banks looked the other way. I don’t know what the central bank was doing. It was a regulator of these. They kept pushing the truth below the carpet,” he said.

    “And we were told that the total NPA (non-performing assets) was Rs 2.5 lakh crore. But when we did the asset quality review in 2015, with the central bank doing it, we found that the NPA was already Rs 8.5 lakh crore,” he added.

    At a lecture on October 26 in Mumbai, Acharya stressed the need for independence in the central bank’s functioning, saying that the market can make the government pay for eroding the bank’s independence.