Urjit Patel attends Parliamentary standing committee meeting, says demonetisaion effect temporary

New Delhi, Nov 27: Reserve Bank of India (RBI) Governor Urjit Patel will on Tuesday attended the Parliamentary standing committee meeting. The agenda of the meeting was to discuss the impact of demonetisation, said reports.

A PTI report while quoting sources said issues related to November 2016 demonetisation of old Rs 500/1000 notes, reforms in the RBI, stressed assets in the banking system, and state of the economy, were listed as agenda items of the 31-member Parliamentary Standing Committee on Finance.

Reports say that Patel told the committee that effects of the demonetisation are temporary. The panel is also said to have asked Patel about RBI's autonomy.

The RBI governor will file a detailed report on the issues raised within next 10 days.

Other issues like mounting NPAs, administrative reforms and impact of demonetisation on farmers are also likely to be discussed.

Last week, the RBI's Central Board met in Mumbai and discussed the Basel regulatory capital framework, a restructuring scheme for stressed MSMEs, bank health under Prompt Corrective Action (PCA) framework and the Economic Capital Framework (ECF) of RBI.

In today's meeting, Patel is expected to apprise the Parliamentary standing committee regarding the impact of demonetisation on Indian economy.

The meeting comes amid stand-off of sorts between the RBI and government. The government feels that the MSME sector which employs about 12 crore people plays a critical role in the economy, and the sector hit by demonetisation and implementation of Goods and Services Tax (GST) needs support. However, the central bank has been averse to government demand for special dispensations for MSME and NBFC sectors as it consider them vulnerable.