Centre under fire as RBI workers allege ‘political intervention’ by Finance Ministry

Mumbai (Maharashtra) [India], Jan. 14 : Political intervention and not taking the Reserve Bank of India (RBI) into confidence by the Centre, while announcing its decision to demonetise currency notes, were some of the prime issues raised by the protesting RBI employees on Saturday.

Speaking to ANI, Suryakant Mahadik, RBI employee's Union Leader, said the Centre's decision to appoint a Joint Secretary and by-passing Governor Urjit Patel to oversee the entire demonetisation process hampered the function of the Central bank.

"We are not against the Centre's decision for demonetisation per se, but they did not take the RBI into confidence before doing so.

Had the RBI Governor, Deputy Governor, and the Executive Director of the RBI been taken into confidence than the present crisis that we are witnessing at the village right now, wouldn't have taken place," he said.

"The Centre appointed a Joint Secretary to keep a watch on the operation and sometime intervention which is not right.

We are only protesting the Centre's intervention into the functioning of the RBI," he added. Dubbing the constant interference of the Finance Ministry into the function of the RBI as "unfortunate", Executive President of the All India RBI Employees' Union Gajanan Kirtikar also expressed similar concerns.

"We objected and written a complaint to the government on January 1, stating that this is unfortunate.

Our prime objection is the interference at the hands of Central Government," Gajanan said. In a letter, the employees said that the autonomy and image of RBI has been "dented beyond repair" due to mismanagement and termed the appointment of a senior Finance Ministry official for currency coordination as a "blatant encroachment" of the RBI's exclusive turf.

In a strongly worded letter addressed to Reserve Bank of India (RBI) Governor Urjit Patel, the United Forum of Reserve Bank Officers and employees had alleged that post the government's demonetisation move, the image of the Central bank has been dented beyond repair.

"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".

In a letter, they said the autonomy and image of the RBI 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.

Meanwhile, the Finance Ministry has clarified its stand stating 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.

Source: ANI