Not seeking transfer of big cut from RBI reserve: Govt

Amid a perceived faceoff with the RBI, the government said on Friday that it is discussing an “appropriate” size of capital reserves that the central bank must maintain but denied seeking a massive capital transfer from the Reserve Bank.

The Reserve Bank of India (RBI) has ₹9.59 lakh crore of reserves, and the government, if reports are to be believed, wants the central bank to part with a third of that fund -- an issue which along with easing of norms for weak banks and raising liquidity has brought the two at loggerheads in recent weeks.

Economic affairs secretary Subhash Chandra Garg took to the twitter to clarify that the government wasn’t in any dire needs of funds and that there was no proposal to ask the RBI to transfer ₹3.6 lakh crore.

The government, he said, is on track to meet the fiscal deficit target of 3.1% for the financial year 2018-19.

“There is no proposal to ask RBI to transfer (₹) 3.6 or (₹) 1 lakh crore, as speculated,” Garg tweeted. “Government’s FD (fiscal deficit) in FY 2013-14 was 5.1%. From 2014-15 onwards, Government has succeeded in bringing it down substantially. We will end the FY 2018-19 with FD of 3.3%. Government has actually foregone (₹) 70,000 crore of budgeted market borrowing this year.”

NEWDELHI:

Indian banks’ loans rose 14.6% in the two weeks to October 26 from a year earlier, while deposits rose 9%, RBI’s weekly statistical supplement showed on Friday. Outstanding loans rose ₹40,740 crore to

₹90.3 lakh crore in the two weeks to October 26.

Bank deposits fell ₹15,050 crore to ₹11,771 lakh crore in the two weeks to October 26.

REUTERS