RBI at crossroads?
In the context of the reported resignation of RBI deputy governor Viral Acharya, a cartoon in The Hindu recalled DeMon and the prematue exit of previous governor Urjit Patel suggesting that bereft of half the stripes, the tiger (Ref: RBI emblem) was half naked! A veteran ex-RBite lamented consecutive premature departure of renowned economists entrusted with management of India's Economy.
M G Wa rrier's Media Response:
June 25, 2019
RBI at crossroads?
This refers to the piece “The plain-speaking outsider at RBI” by Anup Roy (Business Standard, June 25). Though there can be difference of views on scale, all along, those who occupied top positions in RBI, with the exception of a Chakravarty here or a Gandhi there, have risen to the responsibilities given to them and did not surrender their mind or freedom of expression for fear of North Block’s displeasure. Governors like Subbarao started speaking RBI language within months of their occupying the corner office at Mint Road. RBI is a lucky institution. The new finance minister is the new ‘avatar’ who will, by appropriate policy signals, save the image of RBI and send out a clear message that India’s central bank is not facing the threat of extinction.
Unlike other organizations, continuity at the top is a must for central banks. The normalization of the abnormality of short-term tenures for governors and his deputies in RBI from the beginning of the current decade has affected the efficient and smooth functioning of the organization. Centre failed to take cognizance of the mood of the NewGen incumbents who accept top positions in RBI. Now they are not coming depending on any political backing or for improving their CV for their next assignment. They enjoy ‘doing central banking’ as part of their professional advancement.
Delhi’s attack on Mint Road started with the attempt to truncate RBI using the report of the Financial Sector Legislative Reforms Commission as a sharp enough weapon. The timely arrival of Dr Raghuram Rajan on the scene, who had a clear understanding of the evolution and role of RBI helped the institution remain in one piece. Another attack, the gravity of which was not gauged by Dr Rajan, was to weaken the balance sheet of RBI in which effort Dr Bimal Jalan has been roped in.
M G Warrier, Mumbai