Govt won't need RBI cash for next 6 months: Arun Jaitley
26 November 2018
Amidst government demands for the Reserve Bank of India sharing its reserves with the government by pruning total holdings , finance minister Arun Jaitley on Saturday said the government will not require any cash from the central bank at least over the next six months.
Jaitley’s assertion comes after the finance ministry pushed for access to RBI`s surplus reserves prompting the central bank`s board to form an expert panel to look into whether its cash pool is adequate.
During a television interview telecast on Friday, the finance minister rejected opposition charges that the government was seeking access to the bank`s reserves to fund schemes ahead of the 2019 general election.
"I don`t need money in the next six months," said Jaitley. He said his government respected the institution`s independence and that the opposition’s criticism that the government is trying to undermine the central bank`s authority has no basis. Jaitley.
"We respect the autonomy (of the RBI) but, at the same time, if some sectors are starved of liquidity or credit, we will flag those issues. We do so with the RBI."
The Congress party has accused the Narendra Modi government of eyeing the cash reserves held by the RBI.
"Government is determined to `capture` RBI in order to gain control over the reserves," P Chidambaram, a former finance minister and a top Congress leader tweeted last week.
While the government may not ask for direct cash, it wants the RBI to open liquidity taps for banks to lend.
A meeting of the board of the Reserve Bank of India, whose members include government nominees, at its meeting last week advised the RBI to aid small businesses and give banks more time to step up capital norms to encourage lending and stimulate the economy ahead of next year`s election.