The move comes in response to pressure from Prime Minister Narendra Modi's government which faces a general election by next year and is concerned that low farm prices and difficulties small businesses face in borrowing may hurt its prospects with voters.
Some more contentious issues + were kicked down the road to be discussed by newly-formed committees, the sources said.
The government has been pressuring the RBI to reduce capital ratios for banks to speed up loans to small businesses, a key vote bank for the ruling BJP. There are five key state elections in the next few weeks and a general election due next year.
"The meeting happened in a very cordial environment. Most of the issues were resolved in an amicable manner," a board member, who attended the meeting, told Reuters.
"A panel will be formed to work out a framework to determine the reserves requirements of the RBI and transfer surplus funds to the government," the board member said.
A litany of demands from top finance ministry officials prompted warnings from RBI deputy governor Viral Acharya + last month that undermining central bank independence could be "catastrophic," triggering a public feud between the bank and the government.
from Times of India https://ift.tt/2FqoU9Y
