RBI Board Meeting: Central Bank to Form Panel to Review Transfer of 'Surplus' to Govt, Inject Rs 8,000 Crore by Purchasing Govt Securities
The Reserve Bank said that it will inject Rs 8,000 crore into the system through purchase of government securities on November 22.
Mumbai, November 19: The nine hour board meeting of the Reserve Bank of India (RBI) concluded late on Monday evening. The meeting took place after reports of conflict between the government and the RBI on the issue of capital reserves of the Central Bank. The biggest outcome of the meeting on Monday is the central bank's decision to form a panel to review the economic capital framework. The panel would essentially look after the RBI’s capital requirements and negotiate the process for transfer of RBI's surplus to the government. RBI to Inject Rs 8,000 Crore Liquidity on November 2.
The Reserve Bank said that it will inject Rs 8,000 crore into the system through purchase of government securities on November 22. This is done keeping the liquidity crisis in mind. Reports say that credit to SMEs (small and medium sized enterprises) and the topic of lending by state owned banks were among the contentious issues in the meeting between the government and the RBI. Raghuram Rajan on RBI vs Govt Feud: 'Autonomy of Central Bank Must be Respected'.
"Based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward, the RBI has decided to conduct purchase of the following government securities under Open Market Operations for an aggregate amount of Rs 80 billion on November 22, 2018 (Thursday)...,". said the RBI in its statement. (With Agency Inputs)
(The above story first appeared on LatestLY on Nov 19, 2018 10:47 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).