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RBI Vs Government : Meet Agrees To Ease Liquidity For Financial Sector, Increase Credit For Small Business

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The Reserve Bank of India’s day-long marathon board meeting concluded amidst growing differences with the government on host of issues. According to media reports the board agreed to ease liquidity for the financial sector and increase credit to small businesses.

There were rumours of RBI Governor Urjit Patel resigning but that has not happened as of now. One can say sort of a truce has been arrived at between the government and the RBI

RBI Board decided to constitute an expert committee to examine the Economic Capital Framework of the central bank. The Board also advised RBI to consider scheme for restructuring of stressed assets of MSME with aggregate credit facilities of up to Rs 25 crore. There will be a board for Financial Supervision of RBI to examine framework for banks under Prompt Corrective Action (PCA), says RBI.

RBI board also decided to set up a high-powered committee to examine issues related to surplus capital of Rs 9.69 lakh crore with the central bank and advised it to consider a scheme for restructuring stressed assets in the MSME sector.

The RBI announced that it would inject Rs. 8,000 worth of liquidity into the system through open market operations on November 22.

RBI board will meet next on December 14.

Congress president Rahul Gandhi before the RBI meet asked the board to show some spine in its face- off with the government. He tweeted :

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