The differing interpretations of amendments to last year's RBI Act reflect sometimes strained relations between the market and the central bank, and are proving a test for Patel some eight months into his tenure.
"As many have pointed out, it is not clear that we need so many public sector banks. The system could be better off if they are consolidated into fewer but healthier banks," Patel said while delivering the Kotak Family Distinguished Lecture at Columbia University here.
Patel said the calls for protectionism in the US were on account of equity and domestic distribution issues which "textbook economics tells us should be addressed through domestic fiscal policy" such as taxation and income transfers.
According to the depository data, FPIs infused a net sum of Rs 1,132 crore in equities during April 3-21 and another Rs 17,758 crore in the debt segment, translating into a combined inflow of Rs 18,890 crore (US 2.91 billion).
In the minutes of the Monetary Policy Committee meeting, RBI Governor Urjit Patel said that for efficient monetary transmission, it is important that interest rates on small savings are not out of line with interest rates on other comparable instruments in the financial system.
During his stay in Washington and New York, he will hold meetings with American CEOs and institutional and pension fund investors, where he will pitch India as a favourable investment destination.
Having sunk to its lowest level for at least five years in January, consumer price inflation is expected to have risen to 3.98 percent last month from February's 3.65 percent, according to the median forecast of 30 economists.
Even though Reserve Bank of India Governor Urjit Patel feels “further scope for a more complete transmission of policy impulses remains”, banks hold a different view.
At the April 6 policy review meet, the RBI kept repurchase or repo rate -- at which it lends to banks -- unchanged at 6.25 per cent but increased reverse repo rate to 6 per cent from 5.75 per cent.
Observing that loan waiver schemes "engender moral hazard", the Governor pitched for creating a consensus against loan waiver promises in the interest of healthy national balance sheet and public at large.
RBI is said to be discussing all options with the government, including sector-specific and size-specific mechanisms, to speed up resolution of bad loans.
“Banks have reduced lending rates, although further scope for a more complete transmission of policy impulses remains,” Urjit Patel after RBI monetary policy announcement.
The RBI kept its repo rate unchanged at 6.25 percent for a third consecutive policy meeting on Thursday as it continues to guard against a potential flare-up in inflation and an uncertain global economic environment.
The Reserve Bank of India kept its repo rate at 6.25 percent for a third consecutive policy meeting on Thursday .
RBI governor Urjit Patel says farm loan waiver undermines a honest credit culture and discipline. He says that it can also lead to crowding out of private borrowers.
All eyes on the outcome of the RBI's decision on key interest rates which will be out later today.
At a time when banks desperately need some returns from their investment book, a CRR hike can do more harm.
Expecting a status quo on the rates on the first monetary policy review of fiscal 2018 tomorrow, a foreign brokerage today said the central bank is likely to announce liquidity management measures given the Rs 4 trillion glut in the market.
Rising interest rate in the US provides sufficient indication that benchmark policy rate of the Reserve Bank of India is not going to go down but may increase in the future depending on domestic and external factors, experts said.
Unless it springs a surprise like in the previous three policy meetings, key policy repo rates are likely to remain unchanged at 6.25 percent when the RBI announces its policy decision on April 6.
RBI Governor Urjit Patel and his deputies have got a big pay hike with the government more than doubling their basic salary to Rs 2.5 lakh and Rs 2.25 lakh per month, respectively.
The Reserve Bank is likely to opt for status quo despite the March 2017 inflation number being much below the targeted level at next month's policy review, analysts said today.
Expressing concerns over mounting bad loans, Banks Board Bureau (BBB) Chief Vinod Rai has written to Finance Minister Arun Jaitley and Prime Minister's Office underlining the tardy progress made by state-owned lenders in resolving the issue of Non Performing Assets.
Jaitley had called the meeting to deliberate on options on resolution of stressed assets in the banking sector.