Mumbai, July 4 (IANS) Former Reserve Bank of India Governor Urjit Patel has warned against the temptation to deploy public sector banks to kick-start growth via mass-scale lending without proper regulations, as it has the potential to flare up the non-performing asset (NPA) situation again.
In his first interview of the year, Prime MInister Narendra Modi cleared the air on the exit of RBI governor Urjit Patel and fiasco at the top investigating agency CBI.
Speaking at Agenda Aaj Tak, he said that the government does not need a single penny from RBI's capital reserves during the current fiscal.
The new RBI Governor, Shaktikanta Das is a retired 1980 batch of the Indian Administrative Service (IAS) officer of Tamil Nadu cadre.
Das is a retired 1980 batch Indian Administrative Service (IAS) officer of Tamil Nadu cadre.
The government is bent on weakening the RBI and making it pliable to meet its own political needs, he said.
Urjit Patel on Monday resigned from his post with immediate effect, citing "personal reasons".
"Integrity of another institution-RBI, stands denigrated by a tyrannical Modi regime as reflected in RBI Governor's unceremonious exit. Economic anarchy, compromising India's monetary policies and attempting to stifle RBI's independence by government-appointed puppets is the DNA of the BJP," Surjewala tweeted.
Asked about the government-RBI tiff, former Chief Economic Advisor (CEA) Arvind Subramanian told reporters here on Saturday that the central bank's autonomy must be protected because the country will benefit from strong institutions.
Patel had joined the International Monetary Fund (IMF) in 1990 and worked on the USA, India, Bahamas and Myanmar desks at IMF till 1995.
RBI Governor Urjit Patel steps down, cites 'personal reasons' for his resignation
Speaking at the customary post-policy presser after the fifth bi-monthly policy review, wherein the policy rates were left unchanged, Patel parried three questions on these issues.
He told the members that the economy was faring better than the pre-demonetisation period in the "after phase" of demonetisation with the adverse effects receding, sources said.
According to PTI sources, Patel told the 31-member Parliamentary Standing Committee on Finance that the economy would get a boost from oil prices cooling off from four-year highs and said fundamentals were "robust."
The central board, headed by the RBI Governor, is expected to discuss issues mentioned in the agenda circulated to the board members in advance.
RBI Governor was here on Friday and met senior officials in the Prime Minister's Office (PMO), said sources.
"Rs 36,00,00,00,00,000. That's how much the PM needs from the RBI to fix the mess his genius economic theories have created. Stand up to him Mr Patel. Protect the nation," he tweeted.
He said it was not too late for the RBI governor to stand in defence of the Reserve Bank of India, after reports said there was a rift between Patel And 'Team Modi'.
The meeting was chaired by Congress leader Veerappa Moily and attended by former Prime Minister Manmohan Singh among others.
According to sources, the panel headed by veteran Congress leader Veerappa Moily sought answers from Patel over bad loans, bank frauds, cash crunch and other issues during the meeting.
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