A day after the employee unions of the Reserve Bank of India expressed their resentment against alleged interference of the government in the central bank's affairs, the Finance Ministry today said that it fully respects RBI’s independence and autonomy.
"Consultations between the government and RBI are undertaken on various matters of public importance wherever such consultation is mandated by law or has evolved as a practice. Consultations mandated by law or as evolved by practice should not be taken as infringement of autonomy of RBI," the ministry said in a statement.
The United Forum of Reserve Bank Officers and Employees in a letter to RBI Governor Urjit Patel had said employees were feeling "humiliated" by events since demonetisation and alleged that the government has been impinging on the central bank's autonomy by appointing an official for currency coordination.
"It is categorically stated that the government fully respects independence and autonomy of the Reserve Bank of India," the finance ministry said.
The RBI employees on Friday had shot off a letter to RBI Governor Urjit Patel expressing concern over alleged interference by the central government.
The letter asked the Governor whether a recent media report, according to which the Finance Ministry had deputed a Joint Secretary-level officer to the RBI to oversee its currency chest operations, was true.
"If true, this is most unfortunate and we take strong exception to this measure of the government as impinging on the RBI's autonomy and its statutory as well as operational jurisdiction," the letter read.
"Having put RBI in a quandary, now the Finance Ministry has placed their official, as reported, on RBI set-up to 'co-ordinate', allegedly. Apart from showing RBI operations and its gigantic performance in poor light, the government now blatantly encroaches on its jurisdiction, which, we state strongly, we cannot accept."
"We want to state very categorically that RBI is fully capable 'to co-ordinate the central bank's currency chest operations', which RBI have been performing over decades, and we do not need any 'assistance' from anywhere," the employees wrote.
The union raised the issue after at least three former governors -- Manmohan Singh (former prime minister), Bimal Jalan and Y V Reddy -- flagged concerns about the central bank's functioning. Former deputy governors, including Usha Thorat and K C Chakrabarty too have voiced their worries.
The letter said the RBI staff has carried out its job excellently after the move to ban 87 per cent of the outstanding currency by the government.
(With agencies inputs)
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