Topic Of The Day:-“Give And Take: On The Rbi
Board Meeting”
The Centre and the RBI did well at the board meeting to address each other’s concerns
After the heat and dust of the last one month, the board meeting of the Reserve Bank of India on Monday turned out to be muted and professional, as it should have been. Any summary and precipitate action by the Centre to have its way would have created more problems than it solved, apart from it not going down well with the markets. The decisions taken by the board address the concerns of both the Centre and the central bank, though on balance it appears that the RBI carried the day. Two of the biggest concerns of the Centre where it was expecting an immediate resolution — relaxation of the Prompt Corrective Action framework on 11 public sector banks and provision of liquidity for non-banking financial companies — will be addressed at a future date. The first one has been referred to a department of the RBI for examination, while no decision seems to have been taken on the second. In addition, the Centre’s attempt to tap the RBI’s rich reserves has also been staved off for now, with the matter left to be decided by a committee set up exclusively for the purpose. This is as it should be. Given that the membership and terms of reference of the committee will be jointly decided by the Centre and the RBI, there is little scope for either side to complain of bias. The RBI has been transferring all of its surpluses to the Centre in the last five years based on the recommendations of an earlier committee led by Y.H. Malegam. Given this, it is unclearwhat more the new committee can possibly recommend on future surpluses, unless of course it is allowed to go into sharing of the reserves that now exist on the RBI’s balance sheet.
The central bank partially yielded to the Centre on two other issues — the Basel capital framework for banks and easing credit flow to micro, small and medium enterprises (MSMEs). The RBI didn’t concede the demand for alignment of the capital norms to Basel (they are higher now), but by pushing back the deadline by a year for increasing the capital buffer, it has freed up funds for banks to lend. Again, by permitting debt recast for MSME borrowers of up to ₹25 crore, the RBI has attempted to address their credit concerns, which was one of the major demands of the Centre. Clearly, there was enough give-and-take in the meeting that left both sides with the feeling that they had gained something. At Monday’s meeting the board turned hands-on probably for the first time in recent memory, from being just an advisory body. That the meeting went on for over nine hours clearly indicates that there was an intense exchange of views, which is not a bad thing at all. Differences between the Centre and the central bank must be thrashed out in such a setting, rather than in the media or in public speeches.
MEANINGS AND WORDS
1) Precipitate
Meaning: Cause (an event or situation, typically one that is undesirable) to happen suddenly, unexpectedly, or prematurely.
Synonyms: Provoke, Cause, Accelerate, Hasten
Antonyms: Block, Check, Halt
Example: “The incident precipitated a political crisis”
2) Concerns
Meaning: Make (someone) anxious or worried.
Synonyms: Worry, Disturb, Trouble, Bother
Antonyms: Entertainment, Fun, Disinterest
Example: “The roof of the barn concerns me because eventually, it will fall in”
3) Resolution
Meaning: A firm decision to do or not to do something.
Synonyms: Intention, resolve, decision, intent
Antonyms: Apathy, Cowardice, Fear
Example: “She kept her resolution not to see Anne anymore”
4) Prompt
Meaning: Done without delay; immediate.
Synonyms: quick, swift, rapid, speedy, fast
Antonyms: Delayed, Slow, Late
Example: “She would have died but for the prompt action of two ambulancemen”
5) Provision
Meaning: The action of providing or supplying something for use.
Synonyms: Supply, providing, purveying
Antonyms: Removal, Taking
Example: “New contracts for the provision of services”
6) Staved Off
Meaning: to ward off (something adverse)
Synonyms: Avert, Forestall, Head Off
Example: The quartermaster staved off a shortage by requisitioning more than enough supplies
7) Scope
Meaning: The extent of the area or subject matter that something deals with or to which it is relevant.
Synonyms: extent, range, breadth
Antonyms: Extreme, Imprisonment, Limitation
Example: “We widened the scope of our investigation”
8) Bias
Meaning: Inclination or prejudice for or against one person or group, especially in a way considered to be unfair.
Synonyms: Prejudice, Partiality, Partisanship
Antonyms: Tolerance, Antipathy, Justice
Example: “There was evidence of bias against black applicants”
9) Surpluses
Meaning: An amount of something left over when requirements have been met; an excess of production or supply.
Synonyms: Excess, surfeit, overabundance
Antonyms: Essential, Lacking, Necessary
Example: “Exports of food surpluses”
10) Unclear
Meaning: Having or feeling doubt or confusion.
Synonyms: Uncertain, Unsure, Doubtful
Antonyms: Definite, Explicit, Clear
Example: “Users are still unclear about what middleware does”
11) Yielded
Meaning: Give way to arguments, demands, or pressure.
Synonyms: Surrender, capitulate, submit
Antonyms: Deny, Hold, Lose
Example: “The Western powers now yielded when they should have resisted”
12) Easing
Meaning: Make (something unpleasant or intense) less serious or severe.
Synonyms: Relieve, Alleviate, Mitigate
Antonyms: Agitate, Excite, Extend
Example: “A huge road-building programme to ease congestion”
13) Concede
Meaning: Admit or agree that something is true after first denying or resisting it.
Synonyms: Admit, acknowledge, accept
Antonyms: Defend, Dispute, Fight
Example: “I had to concede that I’d overreacted”
14) Freed
Meaning: Remove something undesirable or restrictive from.
Synonyms: Exempt, make exempt, except
Antonyms: Discharged, Released, Free
Example: “His Inheritance freed him from financial constraints”
15) Recast
Meaning: Reshaping it
Synonyms: Copied, Duplicated, Imitated
Example: “In 1919, the bells were recast”
16) Advisory
Meaning: Having or consisting in the power to make recommendations but not to take action enforcing them.
Synonyms: Consultative, consulting, advising
Example: “The Commission acts in an advisory capacity”
17) Intense
Meaning: Of extreme force, degree, or strength.
Synonyms: Great, acute, enormous, fierce
Antonyms: Gentle, Ignorant, Mild
Example: “The job demands intense concentration”
18) Thrashed
Meaning: Beat (a person or animal) repeatedly and violently with a stick or whip.
Synonyms: Hit, Beat, Flog, Whip
Antonyms: Surrender, Bear, Lose
Example: “She thrashed him across the head and shoulders”
