........ In fact, the RBI’s March 18 notification is a major departure from its earlier stand on infrastructure lending. The RBI in April 2009 said that the rights, licences, authorisation
and the like charged to banks as collateral for projects, including
core sector ones, should not be reckoned as tangible security. So
what changed? With the RBI’s apparently huge concession to the
infrastructure sector becoming a reality now, the question that arises
is who in the corridors succeeded in convincing central bank governor
Duvvuri Subbarao to ease its earlier stringent norms. Despite
being a former Union finance secretary, Subbarao has a reputation of not
coming under pressure from anyone including his ex-boss and finance
minister P Chidambaram. During the reviews of monetary policies, he had
earlier surprised the government when he refused to budge an inch on
lowering of interest rates despite North Block openly appealing the
central bank to be a party on India’s growth story. Who then had
convinced the man on Mint Street?.......
Read - ET
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