(FE)
With a new governor at the helm of the Reserve Bank of India (RBI), the government, through its nominees, is unlikely to insist on immediate changes in the way the RBI is being governed at the central bank board’s meeting on Friday. Instead, it will likely seek a broad discussion on the need to tweak the governance structure to make it more consultative, an official source told.
While there is no proposal yet to refer the RBI’s governance matter to an experts’ committee, the government is not averse to the idea of such a panel (along the lines of the one to be set up to determine RBI’s surplus transfer to the government), should board members endorse it. The first board meeting under new RBI governor Shaktikanta Das is expected to be much less stormy than the previous two meetings; but it won’t be without substantive discussions.It will take stock of the liquidity crunch being faced by non-bank lenders and the flow of credit to MSMEs, among others. Analysts feel Das will choose a middle path to take both the government nominees (on the RBI board) and the central bank management on board to avoid a crisis on the governance issue.
