AIBEA says RBI can't be "extension counter" of govt, slams move to transfer huge surplus

Slamming decision of the RBI to transfer its excess reserve to the government, bankers' body AIBEA on Wednesday said the apex bank should not be an "extension counter" of the finance ministry and what is happening now is a matter of "serious concern".

The All India Bank Employees Association (AIBEA) said the RBI was created as an independent institution mandated with the responsibility of ensuring the stability in the economy besides monitoring external stability, monetary stability and money supply.

"RBI is a totally autonomous body and is not expected to be an extension counter of the finance ministry or the government. It has specific tasks to perform which should not be interfered with.

"But, what is happening now is a matter of serious concern where the RBI is apparently forced to bow down to the wishes of the government to release their funds to bridge the fiscal deficit of the government," AIBEA said in a statement.

The RBI board on Monday accepted the recommendations of the Bimal Jalan committee and decided to transfer Rs 1,76,051 crore to the government. The amount consists of Rs 1,23,414 crore surplus or dividend for 2018-19 and another Rs 52,637 crore from its surplus capital.

The umbrella body of the bank unions also said, "This was being objected to by earlier top brass of the RBI and, hence, had to leave their jobs abruptly."
"Further concessions have been extended to them (corporates). This is because the government, including the Prime Minister, is saying that wealth creators should be honoured, protected and respected. The real wealth creators are the workers in the factories and manufacturing sector and the poor peasants in the agriculture sector, but they are not being protected from the huge loss of employment, lay-offs, and from unremunerative prices for their produce."