22:08, 20-Nov-2018
Indian Economy: C.bank and gov't reach consensus on banking issues
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22:05, 23-Nov-2018
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To India now. The Reserve Bank of India and the Indian government have reached a consensus on a variety of banking issues, including the capital adequacy of banks. That's after the two sides had been at loggerheads for about a week. Ravinder Bawa has more from Delhi.
The Reserve Bank of India after one of its longest meetings in recent years climbed down to government pressure and announced certain measures on Monday. The central bank's 18-member board discussed a host of issues including the economic capital framework and capital adequacy. Experts praised the results of the meeting.
The board advised the RBI to let banks recast loans up to rupees 250 million given to micro small and medium enterprises. The RBI board also recommended concessions on the capital adequacy of banks. Contentious issues such as the transfer of surplus reserves and relaxing norms for weak banks were referred to an internal committee.
Both the government and the RBI employed back channels to work out a compromise but unease over liquidity and governance issues still exists. Those issues will be discussed next month. It will be crucial to see how the RBI can meet financial emergencies while maintaining its authority.
Ravinder Bawa, CGTN, Delhi.