New Delhi, November 13: Reserve Bank of India Governor Urjit Patel reportedly met Prime Minister Narendra Modi on Friday, November 9, amid the unprecedented faceoff between the RBI and the Centre. Reports claimed that the meeting was aimed at a working out a solution end the central bank's tussle with the Finance Ministry.

Before meeting Modi, Patel also held discussions with other top officials of the Prime Minister's Office (PMO). The discussion involved issues ranging from "appropriate size of reserves that the RBI must maintain" to the easing of lending norms in a crucial election year. Modi Govt Trying to 'Capture RBI' Ahead of Lok Sabha Polls, This Will Be 'Catastrophic': Chidambaram.

Sources linked to news agency PTI said an understanding could had been reached on liberalising lending to small and medium enterprises -- a section of the economy to which the government has often pledged commitment.

"But it was not immediately clear if an agreement has been worked out to ease liquidity situation for non-banking finance companies (NBFCs) and the RBI parting with its substantial part of its surplus," the report added.

No statement has been released from the Finance Ministry or the RBI signalling a thaw, even as the Opposition has been accusing the Centre of seeking Rs 3.6 lakh crore expenditure from the central bank.

"RBI Governor has so far stood his ground and defended the institution's autonomy. We fear that he may soon have to accept the Centre's demand or submit his resignation," alleged Congress veteran and former Finance Minister P Chidambaram.

The feud between the Finance Ministry and the regulator was out in the open when RBI's Deputy Governor Viral Acharya, while addressing a gathering in Mumbai last month, said any attempt to "compromise the independence" of the central bank will be "potentially catastrophic" for the economy.

The flashpoint in deteriorating ties came shortly thereafter, when the government invoked the "never-before-used" provision of Section 7 under the RBI Act, while authorises the government to direct the RBI.

(The above story first appeared on LatestLY on Nov 13, 2018 09:49 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).