RBI meeting highlights: Panel to look at ECF; RBI to consider easing PCA

RBI board decides to constitute expert committee to examine ECF; membership and terms of reference of the committee will be jointly determined by govt and RBI

4:52 PM

The RBI is willing to take a re-look at its governance norms established in the RBI General Regulations, 1949, which deal with the decision-making process of the RBI. The government wants more independent directors to be part of the committees set up by the board for guidance on key regulations, sources had told Business Standard earlier. (Read more) 

4:49 PM

The RBI is particularly reluctant to ease its economic capital framework, which determines the surplus transfer required to be made to the central government. The government thinks the RBI has Rs 3.6 trillion as "excess capital" in its reserves and wants the central bank to transfer more money to it as part of the surplus. However, the RBI feels it needs to have a stronger balance sheet to deal with a possible crisis and external shocks. (Read more)  

4:08 PM

RBI's capital: Current Account Deficit countries can see outflow of reserves.

4:07 PM

RBI meeting to go on for a long time, according to sources.

4:06 PM

First half of RBI board meeting comprised presentation on RBI's capital.

4:04 PM

Top gainers include Yes Bank, ITC, Tata Motors, IndusInd Bank, Reliance Industries and Vedanta, rising up to 7.19 per cent.

 

While, top losers include ONGC, ICICI Bank, SBI and Asian Paints, falling up to 1.37 per cent.

3:54 PM

With nothing official emerging from the meeting so far the bond and stock markets showed little movement.

3:52 PM

The S&P BSE Sensex ended at 35,775, up 318 points or 0.9 per cent, while the broader Nifty50 index settled at 10,763, up 81 points or 0.8 per cent.

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3:49 PM

The benchmark indices ended nearly 1 per cent higher ahead of the outcome of the RBI board meeting.

3:46 PM

RBI's credibility, reputation could be irretrievably damaged: Chidambaram

P Chidambaram said: "If the governor stands his ground, as our hope is he will, the government is planning to issue a direction to the RBI under section 7 directing the RBI to transfer Rs 1 trillion into the government's account.

 

"In that event, the governor has only two options. One, to transfer the money, or two, resign.

 

"In my view, whichever option is taken by the governor, it will irretrievably damage the credibility and reputation of the RBI. It will also mean capture of the RBI by the government. One more crucial institution will fall from grace."

3:44 PM

Days before the RBI meet, finance minister P Chidambaram said the chain of events could "irretrievably damage" the credibility and reputation of the apex bank.

3:39 PM

3:28 PM

Ahead of the crucial RBI Board meeting, Congress President Rahul Gandhi Monday accused Prime Minister Narendra Modi of destroying institutions and hoped Reserve Bank Governor Urjit Patel has a "spine" and will show the prime minister "his place".

3:26 PM

The benchmark indices are trading nearly 1 per cent higher amid RBI's board meeting.

3:18 PM

Earlier, Business Standard cited unnamed sources saying the RBI might agree at the board meeting to remove some banks from a so-called prompt corrective action plan as the government has made commitments to recapitalise them soon...READ

The corrective action plan has led to sharp slowdown in lending in 11 state-owned banks.
 

Local news agency Cogencis, citing sources, also said the central bank was open to reviewing the corrective action plans, according to TV channel ET Now.
 

The report also said that the RBI would stay strict on bad loan norms and wanted the government to commit more for the health of state-run banks.