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Opposition slams PM Modi, govt for destroying credibility of RBI

In wake of the letter written by employees of Reserve Bank of India (RBI) to its governor Urjit Patel condemning the demonetization drive, the Congress and Janata Dal (United) dubbed it as “shocking state of affair”, while stating that Prime Minister Narendra Modi and his government have destroyed the credibility of the autonomous body that controls the country’s monetary policy.

“I don’t think ever before, the employees of a government institution especially an independent and respectable institution like RBI have written against its national policy. Very clearly RBI has compromised to an extent never ever before. Prime Minister Modi and his government have destroyed RBI, its credibility and the role of an institution,” Congress leader Sandeep Dikshit said.

He further said the way in which the Bharatiya Janata Party (BJP) is compromising and corrupting the RBI, it is going to be a dangerous signal for the nation.

Echoing similar views, JD (U) leader Pawan Varma said, “The RBI must retain its autonomy to advice and formulate or recommend policy to the government. It appears in the case of demonetization that the RBI relinquished its autonomy in order to blindly to the line as dictated to it by the government. This is what has come out now from the letter of the employees in addition there was operational mismanagement that is what the employees have said.”

Varma further said the RBI has a key role in implementing the decision but number of time they have seen flip flops and this is what the RBI employees themselves would have felt.

In a strongly worded letter addressed to Urjit Patel, the United Forum of Reserve Bank Officers and Employees has alleged that post the government’s demonetization move, the image of the Central bank has been dented beyond repair.

“Commenting on the “mismanagement” since November 8 when demonetization was announced and the criticism from different quarters followed, the letter said, “Its (RBI’s) autonomy and image have been dented beyond repair,” an official of the All India Reserve Bank officers Association said.

“We request the Governor of the RBI, its highest functionary and protector of its autonomy and prestige, to do the needful urgently to do away with this unwarranted interference from the Finance Ministry and assure the staff accordingly as the staff feels humiliated,” the letter added.

Various employee unions of the central bank have objected to the government “impinging on RBI autonomy” and have written to Patel to take action against the “unwarranted interference”.

The letter comes days after concerns about RBI’s functioning being raised by at least three former governors — Manmohan Singh (former prime minister), YV Reddy and Bimal Jalan. Former deputy governors including Usha Thorat and KC Chakrabarty have also voiced their concerns in this regard.