Powers of RBI are wide-ranging and comprehensive to deal with various situations that may emerge in all banks.
New Delhi: Barely 20 days after finance minister Piyush Goyal said the government was open to giving RBI more powers to regulate PSU banks, minister of state for finance Shiv Pratap Shukla on Tuesday said the Reserve Bank has “wide-ranging and comprehensive” powers to address various situations in banks.
Reserve Bank governor Urjit Patel has been seeking more powers to deal with the problem of bad loans at public sector banks. Patel had spoken critically of the ownership structure of state-owned banks saying regulatory powers are “not” ownership neutral as RBI’s powers over PSBs are “weaker than” those over the private sector banks. Following criticism that RBI also has to be blamed for the biggest financial scam in the country — the Rs 13,500 crore PNB scam — Patel had blamed it on the lack of powers with the central bank to control the state-run banks.
“As regard the RBI powers, we are examining it and that’s an issue that we will sit with the RBI and will sort out. The government has an open mind on this issue,” Goyal had said when asked about the concerns raised by the RBI governor.
Listing the RBI’s powers to deal with banks, Shukla said the central bank can inspect the lenders, examine on oath any officer, direct special audit and give directions to banks.
Also, wholetime directors of nationalised banks and State Bank of India are appointed in consultation with the RBI, he said in a written reply in the Rajya Sabha.
“... the powers of RBI are wide-ranging and comprehensive to deal with various situations that may emerge in all banks, including public sector banks,” he said.
Replying to another question on whether less money was being put in ATMs after the demonetisation, Shukla said that is not the case.
The RBI has informed that the total amount of notes in circulation (NIC) as on July 18, 2018 was Rs 19.28 lakh crore as compared to Rs 17.74 lakh crore as on November 4, 2016, he said.
“RBI has ensured adequate supply of notes to meet the cash requirement of public and the currency supply is monitored continuously to ensure distribution of adequate currency to various parts of the country,” he said.
The government, he added, has requested all banks to efficiently manage the cash to ensure that adequate cash is available for ATMs and people do not face any problems.