Lok Sabha Question No. 813 (UNSTARRED), answered on 2018-12-14
Subject: Standoff between Government and RBI
Ministry: FINANCE
Asked by: BHARTRUHARI MAHTAB, ANTO  ANTONY, RAHUL RAMESH SHEWALE

## GOVERNMENT  OF INDIA MINISTRY  OF FINANCE DEPARTMENT  OF FINANCIAL SERVICES

## LOK SABHA

## UNSTARRED QUESTION NO. 813

## TO BE ANSWERED ON THE 14 TH  DECEMBER 2018/ AGRAHAYANA 23, 1940  (SAKA) Standoff  between Government  and RBI

## 813.   SHRI BHARTRUHARI  MAHTAB: SHRI ANTO ANTONY: SHRI RAHUL SHEWALE:

Will  the Minister  of FINANCE  be pleased to state:

- (a) whether  there  is a standoff/rift reported  between  Government  and the Reserve  Bank of India (RBI) in the recent  past, if so, the details  thereof  and the major  issues between  the Government  and the RBI;
- (b) whether   the  Government   has  not  respected   the  autonomy   of  RBI  and  destroyed   it  by interference  in its functioning  causing  the said standoff,  if so, the details  thereof  and the reasons  therefor;
- (c) whether  the Government  has requested  to RBI to release more  funds from its reserves,  if so, the details  thereof  and the reasons  therefor;  and
- (d) whether  the Government  has statistics  regarding  funds released  from  its reserves  by  the RBI, if so, the details  thereof  during  the last five years,  year-wise?

## ANSWER Minister of State in the Ministry  of Finance

## (SHRI SHIV PRATAP  SHUKLA)

- (a)  and  (b):  The   autonomy   for  the  Central   Bank,   within   the  framework of  the  Reserve   Bank of  India (RBI)  Act,   is  an  essential   and  accepted   governance   requirement. A  press  release   was  issued  by   the Government  on 31.10.2018  as below:
- 'The autonomy  for the Central  Bank,  within  the framework  of the RBI Act,  is an essential  and accepted governance  requirement. Governments  in India have nurtured  and respected  this.  Both the Government and the Central  Bank,  in their  functioning, have to be guided  by  public  interest  and the requirements  of the Indian  economy.  For the purpose,  extensive  consultations  on several  issues take  place between  the Government  and the RBI from time  to time.  This  is equally  true  of all other  regulators.  Government  of India has never  made public  the subject  matter  of those consultations. Only  the final  decisions  taken  are communicated.   The  Government,   through   these  consultations,   places  its  assessment  on  issues  and suggests possible  solutions.  The  Government  will  continue  to do so.'
- (c) and (d): The Government  asked RBI for a review  of its Economic  Capital  Framework  (ECF) adopted in  2016.  As  per  press  release   by   RBI  on  19.11.2018,   the  Board  has  decided  to  constitute   an  Expert Committee   to  examine   the  ECF,   the  membership   and  terms   of  reference   of  which   will   be  jointly determined   by   the  Government   and  RBI  and  that   RBI  should   consider   a  scheme  for  restructuring of stressed standard  assets of MSME borrowers  with  aggregate  credit  facilities  of up to Rs. 25 crore,  subject to conditions  for ensuring  financial  stability.

The details  of RBI surplus  transferred  to the Government  during  the last five years  are as follows:

| Financial yearof RBI   | Surplustransferredto Government (in croreRupees)   |
|------------------------|----------------------------------------------------|
| 2013-14                | 52,679                                             |

| 2014-15   | 65,896   |
|-----------|----------|
| 2015-16   | 65,876   |
| 2016-17   | 30,659   |
| 2017-18   | 50,000   |

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