Employees of the Reserve Bank have taken strong exception to the recent measures involving the demonetisation of Rs 500 and Rs 1,000 notes, stating that the government "is impinging on the RBI’s autonomy and its statutory as well as operational jurisdiction”.
The employee unions of the Reserve Bank of India (RBI) on Friday expressed their deep concern over alleged interference by the central government in the affairs of the apex bank.
The employees gave vent to their resentment over the alleged interference through a letter addressed to RBI Governor Urjit Patel.
In a letter, they said autonomy and image of RBI has been "dented beyond repair" due to mismanagement and termed appointment of a senior Finance Ministry official as a "blatant encroachment" of its exclusive turf of currency management.
"An image of efficiency and independence that RBI assiduously built up over decades by the strenuous efforts of its staff and judicious policy making has gone into smithereens in no time. We feel extremely pained," the letter said.
"We request the Governor of the RBI, its highest functionary and protector of its autonomy and prestige, to do the needful urgently to do away with this unwarranted interference from the Finance Ministry and assure the staff accordingly as the staff feels humiliated,” the letter added.
Various employee unions of the central bank have objected to the government "impinging on RBI autonomy” and have written to Patel to take action against the "unwarranted interference”.
The Forum’s letter follows reports that the finance ministry had sent a joint secretary to co-ordinate RBI’s cash operations. "If true this is most unfortunate and we take strong exception to this measure,” the Forum said. The Forum represents three RBI unions coordinating the officers and other employees.
"It’s painful to note that the RBI is being criticised by many quarters, for its "operational mismanagement” by the press and many important personalities. Its autonomy and image have been dented beyond repair. Such critics include even former RBI Governors,” the Forum said in the letter.
"Having put the RBI in a quandary, the finance ministry has now placed their officials, as reported, on the RBI set-up to "co-ordinate” allegedly,” it said. "Apart from showing the RBI operations and its gigantic performance in poor light, the government now blatantly encroaches on its jurisdiction, which, we state strongly, we cannot accept.”
The letter says: "We want to state very categorically that the RBI is fully capable to co-ordinate the central bank’s currency chest operations which the RBI has been performing over decades, and we do not need "any assistance” from anywhere.” "We may assume that the RBI did not ask for deployment of a joint secretary of the finance ministry in its functions, rather it’s the finance ministry which has imposed itself on the RBI, which is absolutely unacceptable and deplorable,” it said.
The RBI has been discharging the role of currency management for over eight decades since 1935, it said, adding the central bank does not need "any assistance" and the interference from FinMin is "absolutely unacceptable and deplorable".
The letter comes days after concerns about RBI's functioning being raised by at least three former Governors -- Manmohan Singh (former PM), Y V Reddy and Bimal Jalan. Former Deputy Governors, including Usha Thorat and K C Chakrabarty, have also voiced their concerns.
The letter said the RBI staff has carried out its job excellently following the move to ban 87 per cent of the outstanding currency by the Government.