Rahul Gandhi on RBI meet: Hope Urjit Patel has a spine to show PM Modi his place

Congress president Rahul Gandhi on Monday launched a scathing attack on Prime Minister Narendra Modi over perceived government interference in the Reserve Bank’s functioning. Accusing the prime minister and his “coterie of cronies” of destroying the institution, Gandhi expressed hopes that RBI Governor Urjit Patel will not bend down against Modi.

“Mr Modi and his coterie of cronies, continue to destroy every institution they can get their hands on. Today, through his puppets at the #RBIBoardMeet he will attempt to destroy the RBI. I hope Mr Patel and his team have a spine and show him his place,” the Congress chief wrote on Twitter.

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The remarks of the Gandhi scion came on a day when a crucial RBI board meeting is taking place to discuss several issues, including government’s proposed changes to the RBI Act, 1934, alignment of capital adequacy norms with those in advanced countries and some relaxation in the Prompt Corrective Action framework.

The RBI has been at loggerheads with the Centre since the Finance Ministry’s use of “never used” Section 7 of the RBI Act, which grants special powers to the government to issue directions to the central bank.

According to news agency Reuters, citing sources, the central bank could agree to tweak certain restrictions on lending to improve credit flows for smaller companies with a borrowing limit of Rs 34 lakh.

A day ahead of the meeting, Finance Minister Arun Jaitley on Saturday said that limiting credit availability and liquidity must not affect the growth of the country.

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“If we have to improve on this (growth), we need a certain level of credit flow as far as entrepreneurs are concerned... see that liquidity is maintained,” the finance minister said during an award ceremony in Mumbai.

The board meeting of the RBI came nearly a week after the government rejected reports of its proposal to the central bank seeking transfer of Rs 3.6 lakh crore and said the only plan “under discussion is to fix appropriate economic capital framework of RBI”.