Modi trying to destroy RBI, hope Urjit Patel shows 'him his place': Rahul Gandhi
New Delhi, Nov 19: Amid deepening tension between the Union Government and Reserve Bank of India (RBI), Congress president Rahul Gandhi has hoped the the central bank's governor, Urjit Patel, "has the spine" to stand up to pressure from the government.
Rahul's tweet, which alleges that PM Modi-led government is trying to 'destroy every institution they can get their hands on', came in the wake of the RBI Board meeting which began in Mumbai this morning.
"Mr Modi and his coterie of cronies, continue to destroy every institution they can get their hands on. Today, through his puppets at the #RBIBoardMeet he will attempt to destroy the RBI. I hope Mr Patel and his team have a spine and show him his place," he tweeted.
Today's board meeting is crucial given the differences between the RBI and Finance Ministry on several contentious issues including the transfer of additional surplus from the central bank to the government.
At the board meeting, RBI governor Urjit Patel and his deputies are expected to support its mission to clean up the bank's balance sheets. According to reports, the effort could run into some resistance from the bank's independent directors who are nominated by the central government.
Patel and his four deputies, who all are members of the RBI's 18-member central board, will present a united front, while a few independent directors too are expected to support the central bank's mission to clean up bank balance sheets, sources said.
The central board, headed by the RBI Governor, is expected to discuss issues mentioned in the agenda circulated to the board members in advance. Off-agenda items can also be raised in the meeting, with the chair's permission. The RBI's central board currently has 18 members, though the provision is that it can go up to 21.
The members include Governor Urjit Patel and his four deputies as 'full-time official directors', while the rest 13 have been nominated by the government, including two Finance Ministry officials -- Economic Affairs Secretary and Financial Services Secretary.
The RBI is also expected to consider a special dispensation for micro, small and medium enterprises (MSMEs) and non-banking financial companies (NBFCs) which have been facing liquidity issues. The government feels that the MSME sector -- which employs about 12 crore people and plays a critical role in the economy -- needs some support after being impacted by demonetisation and implementation of the Goods and Services Tax (GST). However, the central bank has been averse to the government's demand as it considers the sectors to be vulnerable.
Meanwhile, Finance Minister Arun Jaitley on Saturday said that growth must not be throttled by limiting credit availability and liquidity.
Amid growing tensions with the central bank, the Finance Ministry had sought discussions under the never-used-before Section 7 of the RBI Act which empowers the government to issue directions to the RBI Governor.
OneIndia News with PTI inputs