Respect autonomy and independence of RBI: Finance Ministry

New Delhi [India]: After facing flack from the Opposition over alleged infringement of the autonomy of the Reserve Bank of India (RBI), the Finance Ministry on Saturday asserted that the Government fully respects the independence and autonomy of the Central Bank. In a statement, the Ministry said that consultations between the Centre 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 statement added.

In wake of the letter written by employees of RBI to its governor Urjit Patel condemning the demonetisation 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 told ANI.

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 demonetisation move, the image of the Central bank has been dented beyond repair.”Commenting on the “mismanagement” since November 8 when demonetisation 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 told ANI here.

“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”.