Letters: Subbarao's right

This refers to “It is business as usual for Chakrabarty” (August 5). The reallocation of portfolios among the deputy governors of the Reserve Bank of India (RBI), with K C Chakrabarty’s role substantially reduced, seems to have been misunderstood by the media. It is missing out on a crucial point which prompted the RBI governor to act swiftly and decisively. The governor of a central bank cannot afford to have a deputy who talks on the sly and is not upfront. This is the point that the RBI governor seems to have driven home. The central bank expects constructive suggestions and even opposition to the proposed move, but not comments made on the sidelines by someone who doesn’t wish to be identified.

RBI should be appreciated in that it does not go public in defence of the policy measures taken by it. It chooses to remain neutral and unmoved whether it is being ridiculed, unfairly criticised and even when it is being praised. This is the hallmark of a rock-solid central bank.

It has been said in defence of Chakrabarty, that former RBI Governor Y V Reddy, when he was deputy governor, had made comments which also resulted in unsettling/moving the market, but no action was taken at that time. Here again, it must be stated that those remarks were made out in the open by a deputy governor who stood by them. He did not request the media “not to be identified”. There lies the whole difference, and a very crucial one.

The last para in your report reads: “However, the secrecy and confidentiality that is attached to an RBI deputy governor’s post perhaps proved to be too formidable for this high-profile former banker.” As a retired official of the central bank, I must put on the record that central bankers as a tribe, so to say, do not talk “out of turn” and maintain a stiff upper lip under all circumstances, despite any provocation.

K K Luthrian, Bangalore