New Delhi, January 19: In a bid to pacify RBI officials who were worried about rising doubts on apex bank’s autonomy, Urjit Patel has written an email to his colleagues. The RBI Governor had asked them to “zealously guard” the integrity and reputation of the esteemed organisation and possess “zero tolerance” for anything that tarnishes the same.
Ever since Prime Minister Narendra Modi announced demonetisation on November 8, questions have been raised in Media as well as experts regarding the implementation of the noteban. The cost of demonetisation is deemed to be exuberant as unprecedented cash crunch not only disturbed the supply chain in the country but has also hurt the GDP and economic growth of FY 16 & FY 17.
Acknowledging demonetisation as a challenging time, he urges officials to stay united to mend the tarnished reputation of central bank.
He writes, “I am confident that all of us working together will rise to the occasion and face these challenges in a manner befitting the reputation of this esteemed organization. Let me emphasise that one thing we should all zealously guard is the integrity and reputation of our organisation and any act belittling the same should deserve zero tolerance from all of us.
During the year gone by, we have continued our efforts at restoring macroeconomic stability in the economy. While the policy actions have already shown positive effects, nevertheless, they are work in progress and need to be fine-tuned constantly to keep pace with the challenging environment.”
Prominent economists of the country, including former RBI Governors such as Manmohan Singh, Y V Reddy and Bimal Jalan have said in the Media that demonetisation of Rs 500 and Rs 1000 crore by Modi government has deeply damaged RBI’s “credibility” and has caused institutional damage in the process.
Just last week, in a strong-worded letter the RBI officials referred finance Ministry’s interference as an act of impinging RBI’s autonomy and statutory as well as operational jurisdiction.
The United Forum of Reserve Bank Officers and Employees wrote: 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 Forum represents three RBI unions which co-ordinate the officers and other employees.
The Forum wrote the letter to Governor Urjit Patel after reports were out that the finance ministry had sent a Joint Secretary to co-ordinate RBI’s cash operations. “If true, this is the most unfortunate and we take strong exception to this measure,” the Forum said.
The government however rubbised all the allegations of interference by the RBI union and said that FM fully respects independence and autonomy of the RBI. “Consultations between the government and 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 an infringement of autonomy of RBI,” said the ministry in an official last week.