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RBI employees urge governor to protect autonomy

RBI and PM Modi has been criticised for the implementation of demonetisation

Reuters  |  Mumbai 

RBI

The employee union of the Reserve of (RBI) has urged the bank's governor to protect central autonomy and not allow the federal to interfere in processes following criticism over how it handled a ban on high-value currency.

The and Prime Minister have been criticised for the implementation of their November decision to abolish high-value bills that accounted for 86 percent of currency in circulation.

Economists said slow replacement of the bills undermined the RBI's reputation for competence, while some raised doubts about the bank's independence for agreeing to implementation with limited preparation.

The RBI's employee union in a letter to the governor dated Jan. 13 said it was "painful" the central was being criticised despite its staff successfully carrying out the "humongous task" of replacing the old bills.

It cited a recent local media report saying the finance ministry had sent a bureaucrat to coordinate the bank's cash operations.

"If true, this is most unfortunate and we take strong exception to this measure of the as impinging on RBI autonomy," the union said in the letter. The RBI did not require any assistance, it said.

"Apart from showing RBI operations and its gigantic performance in poor light, the now blatantly encroaches on its jurisdiction," the union said in the letter, a copy of which was seen by Reuters.

An RBI union member confirmed the authenticity of the letter. The RBI did not provide an immediate comment. The finance ministry in a statement said the "fully respects" the independence and autonomy of the RBI.

"Consultations mandated by law or as evolved by practice should not be taken as an infringement of autonomy of RBI," the ministry said.

Modi's decision on Nov 8 to suddenly scrap 500 and 1,000 rupee banknotes as part of a crackdown on tax dodgers and counterfeiters has resulted in severe cash shortages, impacting companies, farmers and households alike.

The action has also drawn political concern, with some people in Modi's own party anxious that the cash crunch could hurt their prospects in states holding elections this year.

One RBI official involved in drafting the union's letter said employees were worried that intervention in distributing new bills could be politically influenced ahead of state polls.

RBI employees urge governor to protect autonomy

RBI and PM Modi has been criticised for the implementation of demonetisation

RBI and PM Modi has been criticised for the implementation of demonetisation

The employee union of the Reserve of (RBI) has urged the bank's governor to protect central autonomy and not allow the federal to interfere in processes following criticism over how it handled a ban on high-value currency.

The and Prime Minister have been criticised for the implementation of their November decision to abolish high-value bills that accounted for 86 percent of currency in circulation.

Economists said slow replacement of the bills undermined the RBI's reputation for competence, while some raised doubts about the bank's independence for agreeing to implementation with limited preparation.

The RBI's employee union in a letter to the governor dated Jan. 13 said it was "painful" the central was being criticised despite its staff successfully carrying out the "humongous task" of replacing the old bills.

It cited a recent local media report saying the finance ministry had sent a bureaucrat to coordinate the bank's cash operations.

"If true, this is most unfortunate and we take strong exception to this measure of the as impinging on RBI autonomy," the union said in the letter. The RBI did not require any assistance, it said.

"Apart from showing RBI operations and its gigantic performance in poor light, the now blatantly encroaches on its jurisdiction," the union said in the letter, a copy of which was seen by Reuters.

An RBI union member confirmed the authenticity of the letter. The RBI did not provide an immediate comment. The finance ministry in a statement said the "fully respects" the independence and autonomy of the RBI.

"Consultations mandated by law or as evolved by practice should not be taken as an infringement of autonomy of RBI," the ministry said.

Modi's decision on Nov 8 to suddenly scrap 500 and 1,000 rupee banknotes as part of a crackdown on tax dodgers and counterfeiters has resulted in severe cash shortages, impacting companies, farmers and households alike.

The action has also drawn political concern, with some people in Modi's own party anxious that the cash crunch could hurt their prospects in states holding elections this year.

One RBI official involved in drafting the union's letter said employees were worried that intervention in distributing new bills could be politically influenced ahead of state polls.

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Business Standard
177 22

RBI employees urge governor to protect autonomy

RBI and PM Modi has been criticised for the implementation of demonetisation

The employee union of the Reserve of (RBI) has urged the bank's governor to protect central autonomy and not allow the federal to interfere in processes following criticism over how it handled a ban on high-value currency.

The and Prime Minister have been criticised for the implementation of their November decision to abolish high-value bills that accounted for 86 percent of currency in circulation.

Economists said slow replacement of the bills undermined the RBI's reputation for competence, while some raised doubts about the bank's independence for agreeing to implementation with limited preparation.

The RBI's employee union in a letter to the governor dated Jan. 13 said it was "painful" the central was being criticised despite its staff successfully carrying out the "humongous task" of replacing the old bills.

It cited a recent local media report saying the finance ministry had sent a bureaucrat to coordinate the bank's cash operations.

"If true, this is most unfortunate and we take strong exception to this measure of the as impinging on RBI autonomy," the union said in the letter. The RBI did not require any assistance, it said.

"Apart from showing RBI operations and its gigantic performance in poor light, the now blatantly encroaches on its jurisdiction," the union said in the letter, a copy of which was seen by Reuters.

An RBI union member confirmed the authenticity of the letter. The RBI did not provide an immediate comment. The finance ministry in a statement said the "fully respects" the independence and autonomy of the RBI.

"Consultations mandated by law or as evolved by practice should not be taken as an infringement of autonomy of RBI," the ministry said.

Modi's decision on Nov 8 to suddenly scrap 500 and 1,000 rupee banknotes as part of a crackdown on tax dodgers and counterfeiters has resulted in severe cash shortages, impacting companies, farmers and households alike.

The action has also drawn political concern, with some people in Modi's own party anxious that the cash crunch could hurt their prospects in states holding elections this year.

One RBI official involved in drafting the union's letter said employees were worried that intervention in distributing new bills could be politically influenced ahead of state polls.

image
Business Standard
177 22