In response to a forum of RBI staff representing 18,000 employees across all ranks, writing of feeling “humiliated” of the central bank’s lack of autonomy and alleging of the Finance Ministry having an “unwarranted interference”, the Ministry of Finance released a statement saying it respects the autonomy and independence of the Reserve Bank.
Ministry of Finance’s stated, “There has been a report in sections of the Press that some unions have alleged infringement of the autonomy of the Reserve Bank of India. It is categorically stated that the Government fully respects the independence and autonomy of the Reserve Bank of India.”
It further said, “Consultations between the Government and the RBI are undertaken on various matters of public importance wherever such consultation is mandated by law or has evolved as a practice. Consultations mandated by law or as evolved by practice should not be taken as infringement of autonomy of RBI.”
The Ministry’s statement has come in the backdrop of RBI employees writing to Governor Urjit Patel protesting against operational “mismanagement” in the exercise and Government impinging its autonomy by appointing an official for currency coordination. In a letter, they said that the autonomy and image of RBI has been “dented beyond repair” due to mismanagement and termed appointment of a senior Finance Ministry official as a “blatant encroachment” of its exclusive turf of currency management.
“An image of efficiency and independence that RBI assiduously built up over decades by the strenuous efforts of its staff and judicious policy making has gone into smithereens in no time. We feel extremely pained,” the United Forum of Reserve Bank Officers and Employees said in the letter addressed to Patel. Commenting on “mismanagement” since November 8, when note ban was announced, and the criticism from different quarters, the letter said, “It’s (RBI’s) autonomy and image have been dented beyond repair.”
The letter further read, “May we request that as the Governor of RBI, its highest functionary and protector of its autonomy and prestige, you will please do the needful urgently to do away with this unwarranted interference from the Ministry of Finance, and assure the staff accordingly, as the staff feel humiliated,” it said, soliciting “urgent action”. The RBI has been discharging the role of currency management for over eight decades since 1935, it said, adding the central bank does not need “any assistance” and the interference from FinMin is “absolutely unacceptable and deplorable”.
The letter comes days after concerns about RBI’s functioning being raised by at least three former Governors — Manmohan Singh (former PM), Y V Reddy and Bimal Jalan. Former Deputy Governors, including Usha Thorat and K C Chakrabarty, have also voiced their concerns.
(With PTI inputs)
Source: dnaindia.com