Subbarao's 10 commandments for the central bank

The RBI governor gives attributes for the central bank to be future-ready, to facilitate itself to transform knowledge into wisdom

The Reserve Bank of India (RBI) should become a "knowledge institution" to respond to the changing global economic scenario, according to Governor D Subbarao.

Addressing a gathering at the RBI Staff College in Chennai on the occasion of its golden jubilee celebrations, he said the world had gone through an extraordinary economic crisis in the past five years and central banks around the world have been blamed for the same. So, central banks will have to go through a remarkable change.

"There has been a rigorous debate going on across the world, including India, about the autonomy and accountability of central banks," he said. The central bank should not confine itself to monitory policy - it must go beyond that.

RBI should also be attentive to the global happenings and it cannot operate from the ivory tower anymore, he added.

Elaborating on the theory of RBI becoming a knowledge institution, Subbarao gave 10 attributes for the central bank to be future-ready, to facilitate itself to transform knowledge into wisdom.

The attributes he listed were: RBI should learn to manage policy in a globalising world; should be able to make intelligent, mature and balanced judgement; should be open minded to learn new things; must be a learning institution; must be an institution which generates knowledge; should be open, communicative and consultative; must aim at extensive outreach; must take accountability seriously; should think positive; and be driven by values and ethics.

He said RBI would soon come up with a code of ethics.

Earlier, Subbarao justified RBI's decision to allow companies into the banking system. He said it was necessitated by the changing global economic situation. "It was in the best national interest."