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RBI to set up panel to review its economic capital framework
Mumbai, Nov 19 (IANS) The RBI board on Monday decided to form an expert committee to examine the economic capital framework of the central bank, which will decide the amount of reserves it can maintain, handing over the balance to the government.
The board also considered other issues related to the liquidity crunch in the economy and decided that the matter of relaxing the Prompt Corrective Action (PCA) norms to clean up the balance sheet of banks burdened with bad loans will be looked into by RBI’s Board for Financial Supervision (BFS).
Eleven of the 21 state-run banks are under the PCA framework. The non-performing assets (NPAs), or bad loans, accumulated in the Indian banking system have touched a staggering Rs 10 lakh crore.
The decisions were taken following a crucial board meeting here that lasted over 9 hours to discuss the liquidity crisis that initially triggered a tiff between the government and the central bank last month.
“The Reserve Bank of India’s Central Board met today in Mumbai and discussed the Basel regulatory capital framework, a restructuring scheme for stressed MSMEs (micro small and medium enterprises), bank health under the PCA framework and the Economic Capital Framework (ECF) of RBI,” a central bank statement said.
“The Board decided to constitute an expert committee to examine the ECF, the membership and terms of reference of which will be jointly determined by the Government of India and the RBI,” it said.
The government has been wanting the RBI to transfer more money to it from its reserves. However, the RBI feels it needs to have a stronger balance sheet to deal with any potential crisis and external shocks.
The meeting had been called amid growing tensions between the Centre and the RBI after the Finance Ministry recently sought discussions under the never-used-before Section 7 of the RBI Act, which empowers the government to issue directions to the RBI Governor.
“The Board also advised that the RBI should consider a scheme for restructuring of stressed standard assets of MSME borrowers with aggregate credit facilities of up to Rs 250 million (Rs 25 crore), subject to such conditions as are necessary for ensuring financial stability,” it added.
Though the board decided to retain commercial banks’ capital adequacy ratio at 9 per cent, it agreed to extend the period for implementing the last tranche by one year.
“The Board, while deciding to retain the CRAR (capital to risk weighted assets ratio) at 9 per cent, agreed to extend the transition period for implementing the last tranche of 0.625 per cent under the Capital Conservation Buffer (CCB), by one year, that is, up to March 31, 2020,” RBI said.
On the CRAR issue, the government maintains that the capital norm for Indian banks at 9 per cent are much higher than that prevailing for banks overseas.
The RBI’s central board currently has 18 members, including Governor Urjit Patel and his four deputies as full-time official directors, while the rest have been nominated by the government, including the Economic Affairs and Financial Services Secretaries.
–IANS
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Dr. Abhishek Verma Dedicates a Shelter in Memory of His Mother, Veena Verma, at KGMU; Inaugurated by Daughter Nicolle Verma
World-renowned business tycoon Dr. Abhishek Verma has supported Foodman Vishal Singh’s Hunger-Free World mission. In memory of his mother, Late Veena Verma, who was a 3 term Rajya Sabha MP.
Dr. Verma dedicated a state-of-the-art free permanent shelter for the attendants of patients at KGMU Medical University, Lucknow, under the aegis of Vijay Shree Foundation. His daughter, Nicolle Verma, inaugurated the shelter.
During the event, Foodman Vishal Singh honored Nicolle Verma by presenting her with a memento. Mrs. Nidhi Sharma and Avantika Yadav, associated with the organization, welcomed her with garlands. Following this, Nicolle Verma distributed essential items to the attendants and also handed out fruits. She became emotional remembering her grandmother on her birth anniversary.
On this occasion, she also inaugurated the “Veena Verma Sevalaya” in memory of her grandmother, Veena Verma, to serve the attendants. She expressed, “I feel proud that my family is engaged in nation-building as well as social service. Today, in collaboration with Vijay Shree Foundation founder Foodman Vishal Singh Ji, I feel immensely proud to dedicate this shelter for the poor, helpless, and needy attendants of patients battling serious illnesses like cancer. I am honored to be associated with the Hunger-Free World Mission for humanity.”
Inspired by the continuous humanitarian service provided by Vijay Shree Foundation over the past 17 years, Nicolle Verma donated 10 lakh rupees to support the cause. The purpose of this donation is to ensure that services continue for the needy attendants of patients suffering from severe illnesses in hospitals, as facilitated by Foodman Vishal Singh.
It is noteworthy that Dr. Abhishek Verma’s family has a legacy of public and philanthropic service. They are helping millions to carry forward the values and service work of their parents. On the occasion of his mother’s birth anniversary, Dr. Abhishek Verma dedicated this state-of-the-art permanent shelter at Lucknow Medical College to serve the attendants of patients through the Vijay Shree Foundation.
Supporting Foodman Vishal Singh’s Hunger-Free World mission, Dr. Abhishek Verma assured that he would continually support keeping this flame of humanity alive. He also promised to assist in providing medicines to the helpless patients.
Continuing her grandmother’s legacy of service, Nicolle Verma personally served food to the needy patients and attendants. She said, “It is our good fortune to have received the joy of doing this noble work today through Foodman Vishal Singh. I have taken another step forward in carrying my family’s values and cooperation by joining hands with the Vijay Shree Foundation. My father taught me to serve and help the needy, and I feel happy when I bring a smile to someone’s face.”
On the birth anniversary of the late Veena Verma, the event organizer, Vijay Shree Foundation founder Foodman Vishal Singh, said, “We feel proud and happy that Dr. Abhishek Verma, a globally renowned business tycoon, has extended his support to uplift our country from the hunger index. Today, on his mother’s birth anniversary, he inaugurated a state-of-the-art permanent shelter at Lucknow Medical College, which will always be helpful for the needy attendants of patients. It is a pleasure for me and the organization to receive the affection of Mr. Verma.”
The event was attended by General Manager Verma Family Office Hemant Garg, Sonu Rajput, and the organization’s volunteers, including Sandeep Singh, Parmeshwar Ji, Prashant Rao Gautam, Balram Singh, Ramesh Chaudhary, Suman, Jeetu, Anil, Suraj, Vinay, Manish Bhadauria, Manas Mehrotra, Vivek, Apurv, Happy, and others.
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