RBI Governor Urjit Patel briefs parliamentary panel on demonetisation, bank NPAs

Former Prime Minister Manmohan Singh is a member of the committee headed by senior Congress leader and former Union Minister M Veerappa Moily.

New Delhi: RBI Governor Urjit Patel Tuesday appeared before a Parliamentary standing committee meeting to discuss the impact of demonetisation.

31-member Parliamentary Standing Committee on Finance has former Prime Minister Manmohan Singh as a member while it is headed by senior Congress leader and former Union Minister M Veerappa Moily.

Patel apprised the committee regarding the impact of demonetisation on Indian economy and on Indian farmers.

Among other issues that were discussed included the mounting NPAs (Non performing assets) in the public sector banks.

It may be recalled that a crucial board meeting was held last Monday to discuss the liquidity crisis that allegedly triggered a tiff between the government and the central bank last month.

In its last board meeting, RBI decided to form an expert committee to examine the economic capital framework of the central bank, which will decide the amount of reserves it can maintain, handing over the balance to the government.

The board also considered other issues related to the liquidity crunch in the economy and decided that the matter of relaxing the Prompt Corrective Action (PCA) norms to clean up the balance sheet of banks burdened with bad loans will be looked into by RBI`s Board for Financial Supervision (BFS).

With Agency Inputs