The Reserve Bank of India seems to have carried the day, after all, in Monday’s marathon 9-hour board meeting.
Going by the brief statement that it put out, of the six deliveries that it had to play, the RBI has shouldered arms to two — PCA relaxation and capital framework which have been referred for expert study; deftly glanced two more — on liquidity for NBFCs and governance of the central bank — to the next board meet, and effectively fended off the last two bouncers on capital norms and MSME borrowings. Interestingly, of the two issues on which the RBI has seemingly conceded, the concessions are minimal and appear mainly designed for optics so that the government can have something to take back to Delhi from Mumbai. The deferment by a year for a part of the additional capital framework is a small give-away in the face of the Centre’s demand for relaxation of the capital ratio itself. Similarly, the MSME credit recast concession is not a big one, considering the demand from the Centre was for easier NPA norms for the sector and more credit flow. Finally, after all the pre-match sledging, the game seems to have gone off smoothly with both sides playing responsibly.