Finance Minister meets the Directors of the RBI Central Board

Photograph (rbi.org.in/Scripts/bs_viewcontent.aspx?Id=2120)

The customary post-Budget meeting of the Central Board of the Reserve Bank of India with the Finance Minister was held in Mumbai today. This time the meeting was held in Mumbai since it is the Platinum Jubilee Year of the RBI and provided an occasion for the RBI to host the Finance Minister.

Besides Dr. D. Subbarao, Governor of the Reserve Bank, Smt. Shyamala Gopinath, Smt. Usha Thorat, Dr. K.C. Chakrabarty and Dr. Subir Gokarn, Deputy Governors of the Reserve Bank attended the meeting. The meeting was also attended by Shri Namo Narain Meena, Minister of State (Expenditure & Financial Services),  Shri  Ashok Chawla, Finance Secretary and Government nominee director on the Central Board, and Shri R. Gopalan, Secretary, Financial Services.

The other Directors of the Central Board of the Reserve Bank of India present at the meeting include Shri  Y.H. Malegam, an eminent  Chartered Accountant, Prof. Suresh Tendulkar, former Chairman of the Prime Minister’s Economic Advisory Council, Prof. U.R.Rao, space scientist and Chairman, Physical Research Laboratory, Bangalore, Shri Lakshmi Chand, former Secretary, Government of India, Shri H. P. Ranina, Advocate, Supreme Court of India, Smt. Shashi Rajagopalan, consultant with specialisation in accounts and finance, voluntary organisations and cooperative legislation , Shri Suresh Kumar Neotia, former Chairman of Gujarat Ambuja Cement Co., Dr. A. Vaidyanathan, agricultural economist and Professor Emeritus of Madras Institute of Development Studies, Prof. Man Mohan Sharma, chemical scientist and Emeritus Professor of Eminence of Mumbai University Institute of Chemical Technology and Shri Sanjay Labroo, Managing Director and CEO of Asahi India Glass Ltd.

The Finance Minister, while alluding to the resilient and fast paced recovery of the economy, underlined the imperative of reverting to the high GDP growth path and referred to his recent  Budget announcements as being an endeavour in this direction. He recounted the emphasis of the Budget on meeting the three important challenges of quickly reverting back to high growth path, making development more inclusive and improvement of governance. Regarding the specific proposal for constitution of the Financial Stability and Development Council, he assured the Board that this will not undermine the independence of regulators.

Spelling out the key lessons of the crisis, he stressed on the need for proactive domestic oversight and regulation of financial markets and addressing transmission channels of contagion. While appreciating the need for calibrated approach to capital account convertibility and stating that financial innovation should serve the objective of real sector development and promote financial stability, he also stressed the need to undertake financial sector reforms to improve domestic financial intermediation.
In regard to the Government borrowing programme, he expressed a firm hope that with the help of the Reserve Bank, the Government would be able to raise the required resources without affecting the availability of credit for the private sector.

The Directors appreciated the basic focus of the Budget on inclusive growth and applauded the Finance Minister for specific measures for promoting research and development, increased allocation to social sector and fiscal consolidation. There were also discussions on balance of payments, need to further strengthening cooperative institutions at the grass root level and issues raised in the Budget announcements relating to the financial sector.

Summing up the discussion, the Governor said that the Reserve Bank was sensitive to the tradeoff between safety and progress in the area of financial sector reforms which would be managed keeping in view the larger public interest.

Later the Finance Minister attended the Platinum Jubilee function of the Reserve Bank. The function comprised three events: i) unveiling of the plaque depicting the Reserve Bank’s Platinum Jubilee logo; ii) release of the Report on the Working Group to Review the Credit Guarantee Scheme of the Credit Guarantee Fund Trust for MSEs  (Chairman: Shri V K Sharma, Executive Director, RBI) and iii) release of the film showcasing the Reserve Bank’s outreach programmes. The function was attended by senior functionaries of the Finance Ministry, members of the Central Board of the Reserve Bank, chief executives of commercial banks and public financial institutions, former and present senior RBI executives.

Alpana Killawala
Chief General Manager

Press Release : 2009-20010/1210