Letter to BS: Govt has no right to interfere in the affairs of the RBI

The Reserve Bank of India (RBI) has always been looked upon as an autonomous body; under its umbrella come all the commercial banks, be they public sector undertakings or private banks or foreign banks. It is an independent body that decides on crucial decisions affecting bank rates, repo rates et al and also monitors, on a regular basis, the functioning of all banks.

However, for the present government to attack the RBI and make it responsible for the problems in the arena of non-performing assets does not augur well for the banking sector. The government has no right to interfere in the affairs of the RBI and once this happens there is conflict and confusion. The RBI should never be used as a “pawn” in the political chessboard. The government, however, has every right to ask for an answer about the cause of the mounting NPAs and steps taken by the RBI to curb or reduce them.

Ashok Jayaram Bengaluru

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