EC to seek RBI clarification on new banking licences-TOI
NEW DELHI: The Election Commission has decided to seek clarifications from the Reserve Bank of India (RBI) regarding the timing and urgency of its proposal to issue new bank licences by the month-end. In a separate move, the poll watchdog may give its nod to the government's plans to extend a special relief package of Rs 1,351 crore to farmers, whose crops were damaged by the recent rains and hailstorm in Maharashtra and Madhya Pradesh.
A senior EC functionary told TOI that RBI, in its proposal seeking the Commission's approval for issuing new bank licences, had mentioned that the process was initiated n 2010 and then put on the fast-track since July last year. However, the EC has now asked RBI to explain why the final announcement of the new bank licences had to wait until after the announcement of polls, when the process had been on for so long. The Commission also sought to understand the urgency behind announcing the new licences in the middle of the poll season. "What difference will it make if the new licences are announced six weeks beyond the proposed March-end announcement, as the polls would be over by then?" asked an EC official, who did not wish to be identified.
Indications are that clearing the RBI proposal may not be a top priority for the EC right now, as it focuses on its central task of conducting the general election. The first phase of polling gets underway on April 7. A senior RBI official said the central bank was waiting for a response from the EC. "I only know that the RBI has written to the EC seeking their views on this (issuing new banking licences). Whether they have replied or not I have no idea. Uptill yesterday, I had no information on that," K C Chakraborty, RBI deputy governor, told reporters in Mumbai. The government and the central bank were hoping that the new bank licences would be issued by the end of March, a move which would help attract investor interest. "My sense is if all goes well, we should be able to do it in a few weeks," RBI governor Raghuram Rajan had said earlier this month when asked about the timing of the new bank licences.
The Commission is currently on a tour of UP to review poll arrangements, and will be back only on Friday night. Similar reviews are lined up in the coming days, and a decision on the new bank licences may have to wait for longer than the central bank had anticipated.
Meanwhile, the EC is unlikely to come in the way of implementation of empowered GoM's decision to extend special relief ( Rs 1,351 crore ) to hailstorm-affected farmers across Maharashtra and Madhya Pradesh.
"Though no formal proposal had been received from the government until Thursday evening, the Commission is okay with approving relief for the aggrieved farmers, with certain conditions. One condition is that the disbursal of the relief amount should be done in the normal course without any ministerial-level announcements. Second, the party in power should not use the relief package as a campaign tool, which will be deemed a violation of the model code of conduct," an EC official told TOI.
The EGoM on Wednesday decided to provide Rs 1,351 crore financial assistance to farmers in Maharashtra and Madhya Pradesh. A relief of Rs 856 crore has been approved for Maharashtra as against the demand of Rs 1,427 crore from the state, while Rs 495 crore has been approved for Madhya Pradesh. After getting the EC's nod, the central aid will be disbursed through the National Disaster Response Fund.
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