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RBI snubs Modi government as FM demands Rs 3.6 lakh crore from central bank

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Modi Jaitley

The major tussle between Reserve bank of India (RBI) and the Modi government includes the proposal of the Finance ministry that has asked the RBI to transfer a surplus of Rs 3.6 lakh crore to the government to recapitalise public sector banks, help them expand their loan book and come out of the Prompt Corrective Action framework..

 The RBI has rejected the government’s proposal as Rs 3.6 lakh crore is more than a third of the total Rs 9.59 lakh crore reserves of the central bank and transferring such a massive amount to the government will adversely impact macro-economic stability.

The government wants RBI to relax rules and move ahead rather than undertaking the much needed reforms in the banking sector.

Arun Jaitley  has suggested that this surplus can be managed jointly by the RBI and the government,according to the report of Indian Express.

 

Amid speculation that the government may have invoked a hitherto unused section to overrule the Reserve Bank of India (RBI) on the pretext of “public interest”, the central bank has shot back with its own definition of “public interest”.

Reserve Bank Deputy Governor N.S. Vishwanathan, in a recent speech, said when a bank is trying to recover loans from borrowers, it is actually trying to get back depositors’ money and it is not a case of “ruthless big bank” versus “hapless borrower”.

“A correct portrayal of the situation would be: public interest (i.e. depositors and taxpayers) versus borrowers’ interest,” Vishwanathan said at XLRI Jamshedpur in a speech on October 29 that was posted on the bank’s website late on Friday.

It is speculated that the government, in certain cases where it differed with the bank, has invoked Section 7 of the RBI Act that empowers the government to consult the RBI Governor and direct the RBI to act on issues that it considers necessary in public interest.

The government believes that, when compared with global central banks, the RBI holds much higher total capital as a percentage of its total assets (at about 28 per cent).

Countries including the US, the UK, Argentina, France, Singapore maintain much lower capital as a percentage of total assets, while the same for countries including Malaysia, Norway and Russia are much higher than India.

One of the vexed issues between the two is related to RBI’s February 12 circular on stressed assets wherein the RBI has ordered banks to initiate bankruptcy proceedings against all large accounts above Rs 2,000 crore if a resolution plan was not met in 180 days.

Here, the government wants some relief for the stressed assets in the power sector, saying it is different from the other sectors as there are several external factors beyond the promoter’s control that turned it into a defaulter and should be given a special consideration.

However, the RBI maintains that the recognition of default or accounting for deterioration in the quality of asset should be independent of the reasons for such default or deterioration.

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Fire at Delhi’s ITO building, no casualties

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Fire
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A fire broke out at the Institution of Engineers building at ITO on Friday here. No injuries were reported, and the blaze has been brought under control, the Fire Department said.

The fire started from a meter board of the building. “We received a call around 8.30 a.m. about a fire in the meter board at the Institution of Engineers building at ITO. A total of 12 fire tenders were rushed to the site. The fire was on the second floor of the building,” said Atul Garg, Director Delhi Fire Service.

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Maha Congress to agitate for Arnab’s arrest

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Arnab Goswami

Terming the recent revelations of WhatsApp chats of two media personalities Arnab Goswami and Partho Dasgupta as “extremely serious and violative of the Official Secret Act, 1923” the Maharashtra Congress on Thursday announced state-wide protests on Friday (Jan. 22) demanding their arrest and prosecution.

State party President and Revenue Minister Balasaheb Thorat said that the chats between the Republic TV Editor and the ex-BARC head had some serious revelations related to national security and pertaining to the retaliatory surgical strike by India in Balakot, Pakistan.

“How did Goswami get the information on the air-strikes of Feb. 23, 2019, three days before the action was taken? Who is the ‘Big Name’ in the government that he refers to? With whom did Goswami share such sensitive information that is violative of the OSA, 1923,” Thorat demanded.

The Congress leader pointed out that the WhatsApp chats indicate how Goswami enjoys very close ties with Prime Minister Narendra Modi, Home Minister Amit Shah and other ministers in the Bharatiya Janata Party government, many ministers or high-ranking officials have helped him out by flouting rules, and the Pulwama attack pointed to vested interests of some big functionary.

“The chats mention that ‘he will win elections’ on the issue – so did the BJP use the martyrs’ sacrifice only to win polls? What is the connivance between Goswami and the BJP which is dangerous not only for the press freedom, but also the country’s security and democracy,” Thorat pointed out.

Claiming that Goswami is not ‘the only culprit’, the Congress chief alleged that many Central ministers have violated their oath to help the Republic TV chief earn commercial gains, and action must be taken against all those who were party to the entire episode.

Referring to the ongoing TRP manipulations scam and Republic TV illegally using Doordarshan’s satellite frequencies causing huge losses to Prasar Bharati, Thorat said even after DD lodged a complaint, the then Information & Broadcasting Minister Rajyavardhan Rathore failed to take cognizance of the matter and set it aside.

“This shows that Goswami enjoys great support from within the BJP government is it the reason he has been spared of action despite misappropriation of public funds,” Thorat asked.

Last week, Home Minister Anil Deshmukh had said that the state government will seek legal opinion to examine how it could proceed against the Republic TV head in the matter which concerned national security.

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Australian envoy calls on Punjab, Haryana CMs

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Amarinder Singh

Chandigarh, Jan 21 (IANS) Australia’s High Commissioner to India Barry O’Farrell on Thursday called on Chief Ministers of Punjab and Haryana here to explore cooperation in agriculture, water and education.

“Valuable insights from Chief Minister Manohar Lal Khattar-ji on his key priorities for Haryana and opportunities for greater Australia-Haryana cooperation in agribusiness, water and education,” O’Farrell said in a tweet.

He said he met officials of key universities in Punjab and Haryana to explore ways to strengthen education partnerships between institutions in Australia and north India as India’s new National Education Policy is being implemented.

On his meeting with Punjab Chief Minister Amarinder Singh, he tweeted: “Thank you Punjab Chief Minister Amarinder Singh-ji for a great discussion on how we can revitalise our economies post COVID-19, and further deepen our cooperation in agriculture, water and education.”

The envoy said he also enjoyed conversation about Amarinder Singh’s grandfather Maharaja Bhupinder Singh’s and father Maharaja Yadavinder Singh’s contribution to the Indian cricket — one played several first-class cricket matches for India and the other played a Test match in 1934.

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