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RBI vs Government rift highlights: 'Autonomy of RBI within the framework of RBI Act is essential,' says the government in a statement

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The ongoing rift between the Reserve Bank of India and the Centre likely took its first step towards de-escalation after the Arun Jaitley-led Finance Ministry issued a statement reiterating that the autonomy of the monetary policy regulator is within the framework of RBI Act is essential. The government, however, didn't miss to point out that it holds consultations with the RBI on various issues and never makes it public until a final decision is taken. Equity market has responded well to the statement with benchmark indexes, the Sensex and the Nifty, gaining more than a percent. Here are the main highlights from the Reserve Bank of India versus Modi government today:

RBI vs Government rift highlights: 'Autonomy of RBI within the framework of RBI Act is essential,' says the government in a statement
  • Here's what experts have to say on RBI vs Govt rift##Here's what experts have to say on RBI vs Govt rift

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  • Govt statement gives me hope that all is not lost, says Prof Ananth Naryan of SPJIMR##Govt statement gives me hope that all is not lost, says Prof Ananth Naryan of SPJIMR

    Ananth Narayan, Professor, SPJIMR said, "I think this is very welcome news. Hopefully there is discussions happening in the background to resolve whatever issues are outstanding between the RBI and the Ministry of finance and we will not have the issue of going towards being compared with Turkey or any other country. We can do without that problem at this point in time. The statement gives me hope that all is not lost, that we will actually settled down here and move on and act in a more professional fashion."

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  • Read the highlights of RBI deputy governor Viral Acharya's fiery speech against government interference##Read the highlights of RBI deputy governor Viral Acharya's fiery speech against government interference


    In a no-holds-barred speech, Deputy Governor of the Reserve Bank of India (RBI) – Dr. Viral Acharya, on Friday defended the need to protect independence with which the central bank is permitted to work, especially alongside the government. The speech came in the back drop of the RBI’s debate with the government to offer greater control over PSU banks, need to strengthen the RBI’s balance sheet instead of paying surplus as dividend to the government and recent disagreement between the two regarding the RBI’s regulatory oversight on payment and settlement system. Read more

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  • Political expert Sanjaya Baru responds on the government statement##Political expert Sanjaya Baru responds on the government statement

    Responding on CNBCTV18’s question that the government’s statement does not use the word section 7, Baru said, “Whether it use the word section 7 or not the fact is that the Government of India is a sovereign and the Central Bank has been created by the Government of India. I have seen over the last several decades the relationship between the Central Bank and the government they both have to play this game together and the RBI has to behave - as I think Venugopal Reddy famously said the RBI has autonomy as long as the government allows us to have the autonomy. That is a bottom line. So, this whole fuss that has been made about some directive being given that is partly shows the immaturity of the chaps in the Ministry of finance. I think on both sides we are now saddle with relatively inexperienced people which is a pity.”

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  • Here's the full text of Department of Economic Affairs' statement on reports of rift with the RBI##Here's the full text of Department of Economic Affairs' statement on reports of rift with the RBI

    "The autonomy for the Central Bank, within the framework of the RBI Act, is an essential and accepted governance requirement. Governments in India have nurtured and respected this. Both the Government and the Central bank, in their functioning, have to be guided by public interest and the requirements of the Indian economy. For the purpose, extensive consultations on several issues take place between the Government and the RBI from time to time. This is equally true of all other regulators. Government of India has never made public the subject matter of those consultations. Only the final decisions taken are communicated. The Government, through these consultations, places its assessment on issues and suggest possibles solutions. The Government will continue to do so."

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  • Centre issues statement on reports of rift with the RBI##Centre issues statement on reports of rift with the RBI

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  • First on CNBCTV18: Autonomy of RBI within the framework of RBI Act is essential, says govt in its statement##First on CNBCTV18: Autonomy of RBI within the framework of RBI Act is essential, says govt in its statement

    Autonomy of RBI within the framework of RBI Act is essential, says the government in its statement. The government also said that it holds extensive consultations on many issues with the RBI.

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  • DEA & DFS Secretaries say that the Govt will issue a statement##DEA & DFS Secretaries say that the Govt will issue a statement

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  • DFS secy says Govt to soon issue a clarification on the RBI situation##DFS secy says Govt to soon issue a clarification on the RBI situation

    DFS secy says Govt to soon issue a clarification on the RBI situation

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  • Letters of Consultation under Section 7 of the RBI Act were invoked 3 times, reports CNBCTV18's Latha Venkatesh##Letters of Consultation under Section 7 of the RBI Act were invoked 3 times, reports CNBCTV18's Latha Venkatesh

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  • RBI vs Govt: As Urjit Patel may consider exit, here's a look at his career as banker and economist##RBI vs Govt: As Urjit Patel may consider exit, here's a look at his career as banker and economist


    Amid the ongoing verbal quarrel between the Reserve Bank of India (RBI) and the government, sources on Wednesday said that Urjit Patel, the Reserve Bank of India governor, was considering to step down from his position. Patel, who completed two years in the central bank on September 4, has been steadfast in maintaining the top bank's independence and in handling the bad loan cases. Read more

    Also read: Here is the full text of RBI's deputy governor Viral V Acharya's speech in Mumbai

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  • Here's what the Section 7 of the RBI Act says##Here's what the Section 7 of the RBI Act says

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  • RBI vs Government: Here's what Section 7 of the RBI Act states##RBI vs Government: Here's what Section 7 of the RBI Act states


    Government sources on Wednesday clarified that the Section 7 of the Reserve Bank of India Act of 1934 had never been formally invoked, a conversation and consultation maybe on. The clarification came after several news reports claimed that the government had invoked the section amid the ongoing feud between the centre and the central government. Read more

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  • RBI governor Urjit Patel may consider resigning: sources##RBI governor Urjit Patel may consider resigning: sources


    The Reserve Bank of India governor Urjit Patel is considering all options including resigning from his post following an unprecedented attack on the central bank’s functioning by Finance Minister Arun Jaitley. "RBI governor may even consider resigning. All options on the table," multiple sources familiar with the matter told CNBC-TV18 on Wednesday. There is an "irreversible breakdown between RBI governor and the government," one of the source added. Read more

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  • RBI wants the nation to know about its differences with the government##RBI wants the nation to know about its differences with the government


    The Reserve Bank of India (RBI) deputy governor Viral Acharya’s speech has attracted much media attention, but probably the core issues the central bank is raising has not got the attention it deserves. Firstly, there is much angst on why spill the beans in public and why not discuss them privately. It must be obvious to all RBI-watchers that the current regime, if anything, has so far preferred to keep a low profile and speak very little publicly. Read more

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  • Economic Affairs Secretary says No Comment w.r.t Invocation Of Section 7 Of The RBI Act##Economic Affairs Secretary says No Comment w.r.t Invocation Of Section 7 Of The RBI Act

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  • Government invokes powers to direct RBI governor, says report##Government invokes powers to direct RBI governor, says report


    The Indian government has invoked never-before-used powers under the RBI Act allowing it to issue directions to the central bank governor on matters of public interest, the Economic Times reported on Wednesday. Read more

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Market Movers

CompanyPriceChng%Chng
Bharti Airtel567.90 27.35 5.06
Tata Steel1,365.00 34.35 2.58
SBI Life Insura1,133.40 28.25 2.56
Divis Labs4,890.60 99.20 2.07
IndusInd Bank992.75 16.95 1.74
CompanyPriceChng%Chng
Bharti Airtel567.90 27.45 5.08
Tata Steel1,365.15 34.65 2.60
IndusInd Bank992.30 16.65 1.71
Bajaj Finserv13,985.70 184.50 1.34
ICICI Bank685.30 7.65 1.13
CompanyPriceChng%Chng
Kotak Mahindra1,652.85 -45.10 -2.66
Cipla889.90 -23.20 -2.54
Tata Motors284.45 -6.95 -2.39
Dr Reddys Labs4,731.75 -111.60 -2.30
M&M728.70 -16.85 -2.26
CompanyPriceChng%Chng
Kotak Mahindra1,653.20 -44.75 -2.64
Dr Reddys Labs4,730.20 -114.15 -2.36
M&M728.45 -16.95 -2.27
Power Grid Corp228.05 -4.05 -1.74
NTPC116.70 -2.05 -1.73

Currency

CompanyPriceChng%Chng
Dollar-Rupee74.3750-0.0850-0.11
Euro-Rupee87.7990-0.2130-0.24
Pound-Rupee103.1560-0.2030-0.20
Rupee-100 Yen0.6758-0.0024-0.35