RBI: Autonomy and accountability

RBI autonomy, though a must, has to go hand in hand with a clear structure of accountability

Nitin Desai

The government has opened up the issue of the relationship between the finance ministry and the RBI. The public criticism by each protagonist about the other in the weeks leading up to the November 19 board meeting was unbecoming. Fortunately, the fears of a serious breakdown and possible resignation have turned out to be misplaced. A process has been initiated to revisit the provisioning for risk management from the RBI’s profits and to assert greater influence by the government, through its nominee and chosen board directors, on the RBI’s exercise of its regulatory authority ...