Govt-RBI row may delay bill, Urjit to skip LS panel hearing

New Delhi: The ongoing standoff between the Centre and the Reserve Bank of India could delay a high-profile parliamentary panel’s report on proposed legislation that will provide for a mechanism to ban unregulated deposit schemes, as the central bank’s governor Urjit Patel has expressed his inability to present himself before the committee on November 12.

Highly-placed sources told this newspaper that owing to Mr Patel’s absence, the scheduled sitting of the parliamentary standing committee on finance next week has been postponed. This could delay the committee’s finalising its report on the Banning of Unregulated Deposit Schemes Bill 2018.

Soon after the bill was introduced in the Lok Sabha in July this year in the Monsoon Session, it was referred to the parliamentary panel, which was due to prepare its final report within three months — before the Winter Session of Parliament.

Sources said Mr Patel had recently sent a missive to the committee indicating that owing to his “busy schedule”, he won’t be able to present himself before it on November 12. The panel had summoned the RBI governor to discuss the pending legislation.

Sources said that after hearing the views of the RBI governor, the panel intended to give final touches to its report on the bill as the Winter Session is likely to begin next month.

There is speculation that the central bank governor could have excused himself owing to the fact that RBI’s board is due to meet on November 19, and considering the heated exchanges between the Centre and the bank over the past few days, the board meeting’s proceedings would be under intense scrutiny.

The RBI board meeting could witness some heated deliberations in the light of the standoff, especially among board members — mainly between government-backed nominees and non-official directors and deputy governors.

Meanwhile, the parliamentary panel, which is headed by Congress MP M. Veerappa Moily, has held a series of meetings over the last one month on the Banning of Unregulated Deposit Schemes Bill 2018.

The committee is supposed to submit its final report on the bill within three months, and is therefore racing against time to complete it. In its past three sittings, it has met representatives from the department of financial services of the finance ministry, representatives of the corporate affairs ministry and officials of Sebi. The Banning of Unregulated Deposit Schemes Bill 2018 provides for a mechanism to ban unregulated deposit schemes and protect the interests of depositors. It also seeks to amend three laws, including the Reserve Bank of India Act 1934 and the Securities and Exchange Board of India Act 1992.