Undermining the identity of RBI should be a matter of concern: Y V Reddy

Undermining the identity of RBI should be a matter of concern: Y V Reddy: Interview with the former RBI Governor, Y V Reddy...


The BS interaction with former RBI Governor Y V Reddy (Business Standard, January 25) gives deep insight into the conduct of bureaucrats, politicians and economists of different denominations which is dependent on their background and career path. Such revelations should help present and future incumbents who are destined to play their role in policy formulation and implementation, which, all do with welfare of the people in mind.
The concern expressed by Dr Reddy about the neglect of public goods need special attention from today’s policy makers. While public goods at primary level include those listed (environment protection, public health, security and law and order) and deserve policy focus, the role of ‘distributive justice’ in management of resources cannot be underestimated.
Of all the resources, the measurable one is financial and therefore the role of Reserve Bank of India in managing currency, monetary policy and debt (internal and external) becomes of paramount significance in India’s economic growth. Dr Reddy’s observation that ‘undermining the identity of RBI should be a matter of concern’ should be viewed in this context. As banking system works on public trust, undermining the stability and strength of the institution responsible for the financial sector regulation and supervision will have an impact on the institution’s ability to perform its mandated role.
M G Warrier, Mumbai


S.K.Gupta said…
Dr Reddy deserves people's appreciation for justifiably raking up such a vital issue more so when some deliberate attempts are being made nowadays from the vested quarters to squarely tarnish the image of the RBI. This out-spoken write-up could not have come at a better time. I wish to endorse your well meaning views which go on to clarify the role of the RBI by placing the same in a proper perspective. The moot question is: Can we think of a central bank in any country where the govt may be frequently mandating it to act as per its "own" suitability and not as per its Constitutionally given mandate despite the fact that all this could cause some unsavoury position for it in the public eyes? Why the RBi should also be treated like a 'caged' bird? It should be given enough breathing space so as to justify its very establishment.



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