RBI Board, Govt meeting underway to solve rifts

New Delhi/Mumbai: A crucial meeting of the Reserve Bank of India and the Government is underway on Monday to draft new prompt corrective actions for weak lenders  amid increasing non-performing assets and bad loans, providing liquidity to non-banking financing companies and new capital guidelines for the central bank.

The RBI Board of Directors include five full time members -- RBI Governor Urjit Patel, Deputy Governors N S Vishwanathan, Viral V Acharya, B P Kanungo and Mahesh K Jain.

The Government has inducted Department of Economic Affairs Secretary S C Garg and Department of Financial Services Rajiv Kumar into the Board as its representative. The Board has also 11 independent directors.

The meeting is also expected to take up issues of resolving liquidity crunch to lend sufficient capital to non-banking finance companies in wake of IL&FS defaults.It may also frame new prompt corrective actions (PCA) for weak banks amid growing bad loans in order to make them stable and stand on their own feet.

The meeting is likely to also discuss the issue that there should be sufficient capital and easier norms for small and medium businesses.The issue of RBI reserve surplus is also expected to  surface in the meeting of which the Central Bank is not in favour.  

Besides, sources say the government has recommended that the RBI Board frame rules and regulations such as financial stability and monetary policy transmission. However, the Bank wants that these regulations should be draft by experts only.(UNI)