Urjit Patel’s comments bring Finance Ministry-RBI tussle on the issue of wilful defaulters into open

The finance ministry, which has already expressed their displeasure over Patel’s public defence of RBI in the Nirav Modi case, on Friday, hit back at RBI.

Published: 17th March 2018 01:55 AM  |   Last Updated: 17th March 2018 07:03 AM   |  A+A-

Reserve Bank of India Governor Urjit Patel (File | Reuters)

Express News Service

NEW DELHI: The public outburst of Urjit Patel, the low-profile governor of Reserve Bank of India (RBI), has raised several eyebrows in the North Block, which has once again turned the gun towards the central bank, this time over the issue of wilful defaulters.

The finance ministry, which has already expressed their displeasure over Patel’s public defence of RBI in the Nirav Modi case, on Friday, hit back at RBI accusing that the central bank failed to come up with a legal definition of wilful defaulters.

“The outburst was unexpected. They enjoy enough autonomy and cannot shrug away from responsibility. Till date, they have not been able to define who is a wilful defaulter. The definition they proposed was already challenged and quashed by the Gujarat High Court. In that case, it becomes difficult for the government to prepare a list and to take legal recourse,” a senior finance ministry official told The New
Indian Express.

The official claimed the lack of legal definition for wilful defaulter, it may be difficult for the government to initiate any action.

According to experts, the relation between the Mint Street and the North Block always remained uncomfortable due to the classical dilemma over who controls the money, the mint or its owner.

There were multiple instances where the differences came to public. The finance ministry came into the open with their disagreement with the then RBI governor D Subbarao over his strict stand on monetary policy.

The differences were worse when Raghuram Rajan – famous for his comment “My name is Raghuram Rajan and I do what I do” – was RBI boss. However, he had to suffer the consequence for his comment with his unceremonious exit.

Patel speak

Known to be a man of few words, Urjit Patel’s recent public comments that RBI alone cannot be faulted for the spate of bank frauds took many by surprise

Patel blamed the “dual regulation” of public sector banks by the finance ministry in addition to RBI, for the sorry state of affairs in the banking sector

13k cr scam at Punjab National Bank, according to Patel, was not because of laxity  on the part of RBI

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