Governor Shaktikanta Das Says RBI To Decide On Interim Dividend

Scroll Explainer What is behind the RBI’s U-turn on credit to small businesses

Scroll Explainer What is behind the RBI’s U-turn on credit to small businesses

The RBI could make a final decision on the dividend by the time Jaitley presents the government's budget on February 1, the sources said. "As and when any decision (on interim dividend) is taken the Reserve Bank will not delay in announcing the decision", he said.

"Elected governments have the constitutional mandate to take decisions with regard to their finance but every state government, before taking decisions on any kind of farm loan waivers, has to very carefully examine its fiscal space", he said.

The government and RBI have now appointed a panel to look into the issue around the sharing of the RBI's reserves.

Mr. Das was responding to queries based on a Reuters report that the RBI would be transferring anywhere between ₹30,000 and 40,000 crore to the Centre as interim dividend.

"We do realise that governance reforms are an important component of the revival of public sector banks", said Das who replaced Urjit Patel as RBI Governor last month after Patel resigned following a tiff with the government on liquidity issue.

The RBI Governor said he will meet non-banking financial companies tomorrow to get a perspective on liquidity needs.

"Regarding liquidity, the RBI is constantly monitoring the situation and will take steps whenever there is a need to deal with a liquidity deficit if it is noticed", the Governor added.

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The central bank had earlier said the liquidity conditions will be monitored and depending on the assessment, the RBI may consider similar quantum of OMO purchases until end of March 2019.

Das was speaking to the media after his meeting with the trade bodies on issues concerning Micro, Small and Medium Enterprises (MSME) here on Monday.

"So, without throttling (and) without putting impediments in any manner on the working of the banks, allowing them sufficient commercial flexibility and creating an environment where the banks not only come out of the NPAs but also grow", he said.

"Therefore, caution and care has to be exercised by the RBI so that excess liquidity, which sometimes has certain adverse consequences, is not created", he said.

When asked about his views on loan write-off for farmers by state governments, he said farm loan waiver is related to the fiscal space that a particular state government has.

"RBI would not like a situation where liquidity becomes a kind of a loose money". "We hope the banks and MSME units will work together to see that the scheme is implemented in letter and spirit", he said. "However, without looking into the viability aspect, it will not be possible to implement the restructuring scheme", he said. The statement signals Das' bid to emerge as an independent central bank governor and shrug off charges of being close to the government.

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