RBI's autonomy and image 'dented beyond repair'

RBI staff tell Governor Urjit Patel that the central bank's image of efficiency and independence has 'gone into smithereens in no time.'

Feeling 'humiliated' by events since demonetisation, Reserve Bank of India employees on Friday, January 13, wrote to RBI Governor Urjit Patel protesting against operational 'mismanagement' in the exercise and the government impinging on its autonomy by appointing an official for currency coordination.

In a letter, the RBI staff said the central bank's autonomy and image has been 'dented beyond repair' due to mismanagement and termed the appointment of a senior finance ministry official as a 'blatant encroachment' of its exclusive turf of currency management.

'An image of efficiency and independence that the RBI assiduously built up over decades by the strenuous efforts of its staff and judicious policy making has gone into smithereens in no time. We feel extremely pained,' the United Forum of Reserve Bank Officers and Employees said in the letter addressed to Dr Patel.

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Commenting on the 'mismanagement' since November 8, when the note ban was announced, and the criticism from different quarters, the letter said, 'Its (the RBI's) autonomy and image have been dented beyond repair.'

At least two of the four signatories -- Samir Ghosh of the All India Reserve Bank Employees Association and Suryakant Mahadik of the All India Reserve Bank Workers Federation -- confirmed the letter.

The other signatories are C M Paulsil of the All India Reserve Bank Officers Association and R N Vatsa of the RBI Officers Association.

The forum represents over 18,000 RBI employees across the ranks, Ghosh said.

The letter said appointment of an officer to coordinate currency management is a 'blatant encroachment' on the central bank's exclusive jurisdiction on currency and accused the government of 'impinging on RBI autonomy.'

'May we request that as the Governor of the RBI, its highest functionary and protector of its autonomy and prestige, you will please do the needful urgently to do away with this unwarranted interference from the ministry of finance, and assure the staff accordingly, as the staff feel humiliated,' te letter said, soliciting 'urgent action.'

The RBI has been discharging the role of currency management for over eight decades since 1935, the letter said, adding the central bank does not need 'any assistance' and the interference from the finance ministry is 'absolutely unacceptable and deplorable.'

The letter comes days after concerns about the RBI's functioning were raised by at least three former governors -- Dr Manmohan Singh, Y V Reddy and Bimal Jalan.

Former RBI deputy governors, including Usha Thorat and K C Chakrabarty, have also voiced their concerns.