The reserves held by the Reserve Bank of India are necessary in view of global volatility and in order to maintain high creditworthiness, the central bank governor Urjit Patel told the parliamentary panel on Tuesday, as per a Times of India report.
The remark indicates that the centre is not likely to receive higher cash transfers soon, the report said.
“These reserves are meant to be used during periods of stress and not for meeting normal needs”, The Time of India sources quoted Patel telling the finance standing committee.
The governor’s comments to the committee are significant as the issue of the level of reserves to be maintained was one of the major flashpoints in a bitter battle between the central bank and the government.
According to the report, the central bank asserted that a major part of the reserves, around Rs 9.7 lakh crore or 28 percent of assets, exist and should not be disturbed.
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