“We respect the autonomy (of the RBI) but, at the same time, if some sectors are starved of liquidity or credit, we will flag those issues. We do so with the RBI.”
Mumbai: India does not need money from the Reserve Bank of India (RBI) in the next six months, the
finance minister said, rejecting opposition charges the government was seeking access to the bank’s
reserves to fund schemes ahead of the 2019 general election.
“I don’t need money in the next six months,” Finance Minister Arun Jaitley told a news channel. Critics
accuse the government of trying to undermine the central bank’s authority, but Jaitley said his
government respected the institution’s independence.
“We respect the autonomy (of the RBI) but, at the same time, if some sectors are starved of liquidity
or credit, we will flag those issues. We do so with the RBI.”
The Congress has accused Prime Minister Narendra Modi’s government of eyeing the cash reserves held by
the RBI. “Government is determined to ‘capture’ RBI in order to gain control over the reserves,” P.
Chidambaram, former finance minister and senior Congress leader tweeted last week.
The government has been pushing for access to RBI’s surplus reserves prompting the central bank’s board
to form an expert panel to look into whether its cash pool is adequate.
The board whose members include government nominees, in a meeting last week, advised the RBI to aid
small businesses and give bankers more time to step up capital norms to encourage lending and stimulate
the economy ahead of next year’s election.