RBI governor Urijit Patel questioned over demonetisation again by parliamentary panel

In order to give an account of demonetisation and Non Performing Assets (NPA) situation in public sector banks, the Reserve Bank of India (RBI) governor on Tuesday appeared before a parliamentary panel.

The parliamentary panel is headed by former Union Minister M Veerappa Moily and former Prime Minister Dr Manmohan Singh. (Image: PTI)

New Delhi: In order to give an account of demonetisation and Non Performing Assets (NPA) situation in public sector banks, the Reserve Bank of India (RBI) governor Urijit Patel on Tuesday appeared before a parliamentary panel, news agency PTI quoted its sources as saying. However, it is to be noted that Patel was earlier scheduled to appear before the panel on November 12. Source further informed the news agency that issues pertaining to 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. Patel had appeared before the panel days after central bank met the government officials during the central review meeting over issues ranging from appropriate size of reserves to be maintained by RBI to easing of lending norms for small and medium enterprises. The parliamentary panel is headed by former Union Minister M Veerappa Moily and former Prime Minister Dr Manmohan Singh is a member of the committee. A recent report suggested that the Central Bank has more than adequate reserves and that it can transfer over Rs 1 trillion to the government after a specially constituted panel identifies the excess capital. During its board meeting conducted last week, RBI decided to form a committee which is likely to be announced later this week. “We expect the proposed committee on the RBI’s economic capital framework (ECF) to identify Rs 1-3 trillion, which is 0.5-1.6 per cent of GDP, as excess capital,” news agency PTI quoted analysts at Bank of America Merrill Lynch as saying in a note. The central bank can transfer Rs 1 trillion to the government if the transfer is limited to passing excess contingency reserve and can go up to Rs 3 trillion if the total capital is included, said the brokerage report.