RBI staff union backs calls for autonomy, warns Centre

Mumbai, Oct. 29: Days after deputy governor Viral Acharya raised concerns over the central bank’s autonomy, the RBI employees association on Monday came out in support of the views, saying “undermining the central bank is a recipe for disaster” and the government to stop nibbling at its autonomy.

Delivering the AD Shroff memorial lecture last week here, Mr Acharya said governments that did not respect their central banks’ independence would sooner or later incur the wrath of financial markets.

“We firmly hold that undermining the central bank is a recipe for disaster and government must desist,” All India Reserve Bank Association said in a letter.

The association said Mr Acharya’s comments about the government’s interventionist role vis- avis the RBI has created a flutter across the nation.

“This is, however, not a sudden outburst, but was waiting to happen due to long simmering discontent,” the association said.

Giving a cricketing analogy, Mr Acharya had said a government’s horizon of decision- making was rendered short, like the duration of a T20 match, by several considerations.

“There are always upcoming elections of some sort – national, state, midterm,” he said, adding “as elections approach, delivering on proclaimed manifestos of the past acquires urgency; where manifestos cannot be delivered upon, populist alternatives need to be arranged with immediacy.”

In contrast, a central bank plays a test match, trying to win each session but importantly also survive it so as to have a chance to win the next session, and so on, Mr Acharya had said.