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'Zero tolerance' towards efforts to belittle RBI's reputation: Urjit Patel tells staffers

RBI Governor Urjit Patel has told colleagues that any effort to belittle the reputation of the central bank deserves “zero tolerance” and asked them to guard the integrity of the institution.

In his first address to the staff after taking over as the 24th Governor on September 4, 2016, Patel, in an email, said the RBI has achieved the excellence only because of the collective efforts of its employees. Specifically talking about the withdrawal of Rs 500 and Rs 1,000 notes by the Centre on November 8, he said, “Let me emphasise that one thing we should all zealously guard is the integrity and reputation of our organisation and any act belittling the same should deserve zero tolerance from all of us.”

It may be noted that during the demonetization drive, a few senior RBI employees were held for alleged money laundering and illegal exchange of banned notes. Following this, the CBI had in December arrested a few RBI officials. Post-note ban announcement, the RBI in general and Patel in particular, were also criticised by Opposition politicians as well as analysts over “abdication” of responsibility by the monetary authority.

Some of Patel’s predecessors including D Subbarao, Y V Reddy, Bimal Jalan, and Manmohan Singh, criticised the apex bank for not doing enough to reassure the public in the wake of currency invalidation exercise. During the 50-day demonetization period, the RBI faced flak for numerous flip-flops over currency exchange norms. “I am confident that all of us working together will rise to the occasion and face these challenges in a manner befitting the reputation of this esteemed organisation,” Patel said in his email to the employees on the eve of the New Year.

Patel said that during the year gone-by, RBI continued its efforts at restoring macroeconomic stability to the economy. “While the policy actions have already shown positive effects, nevertheless they are work in progress and need to be fine-tuned constantly to keep pace with the changing environment,” he said.

RBI employees union, feeling “deeply humiliated” by the events since demonetization, on January 13 wrote a letter to Patel protesting against operational mismanagement in the exercise and the government bid to impinge on its autonomy by appointing an official for currency coordination. In the letter, they claimed this has “dented beyond repair” RBI’s autonomy. They said appointment of a senior Finance Ministry official for currency coordination was a “blatant encroachment” on RBI’s exclusive turf of currency management.