New Delhi : RBI governor Urjit Patel will on July 6 appear before a parliamentary panel which has called him for the fourth time to discuss the demonetisation move. On the previous two occasions, the central bank governor sought exemption saying that he was occupied with the monetary policy.
The Parliamentary Standing Committee (PSC) on Finance, headed by Congress MP Verappa Moily, had questioned Patel once – on January 18— on the move to ban Rs 500 and Rs 1,000 denomination notes.
Patel had appeared before the panel on January 18, but sought exemption from appearance on two subsequent occasions, saying he was busy with the monetary policy review. The RBI’s Monetary Policy Committee held its two-day policy meet on June 6-7.
“Patel has been asked to appear again before the panel on July 6 to brief the members of the PSC looking into the demonetisation decision,” a member in the panel said. Members are keen to know the exact amount of cash that has been deposited in banks after the Centre’s demonetisation decision, the member added.
Patel has been called after former Prime Minister Manmohan Singh, also in the panel, insisted on calling the RBI Governor despite strong opposition by BJP members in the PSC. Interestingly, it was Singh who had come to rescue of Patel in the committee’s meeting in January when few members tried to grill him.
The Committee had also called top Finance Ministry and RBI officials in January to discuss the impact of demonetisation. The members will also enquire on when bank operations will be ‘normal’.
In January, this panel started reviewing the Centre’s decision of demonetisation and has called top officials from various ministries, banks and also RBI. On 8 November last year, the Centre banned Rs 500 and Rs 1,000 banknotes to curtail the shadow economy and crack down on the use of illicit and counterfeit cash to fund illegal activities and terrorism.
RBI likely to cut key policy rates: Report
New Delhi : The Reserve Bank is expected to cut key policy rates by 25 bps on August 2, which in turn will signal banks to cut lending rates before the busy industrial season sets in October, says a report.
According to Bank of America Merrill Lynch, further delays in RBI rate cuts will likely endanger the much-needed bank lending rate cut before the busy industrial season, reports PTI. “If the RBI MPC cuts on August 2, it will signal a lending rate cut to banks… After all, real lending rates are running at a 20-year high,” BofAML said in a research note. BofAML expects the RBI MPC to cut rates by 25 bps on August 2 if the rains are normal. The global brokerage firm noted that May CPI inflation is expected at about 2.5 per cent and daily data show food inflation is falling even further in June on a good summer rabi harvest while the India Met has also upgraded its monsoon forecast to 98 per cent of normal from 96 per cent with the El Nino weakening. Further, core CPI inflation has slipped to a low 4.1 per cent. In the monetary policy review on June 7, RBI left key rates unchanged with Governor Urjit Patel noting that the central bank wanted to be more sure that inflation will stay subdued.
