RBI Governor asks staff to ‘zealously guard’ central bank’s reputation

RESERVE BANK of India Governor Urjit Patel has asked his colleagues to “zealously guard the integrity and reputation of our organisation” and emphasised that “any act belittling the same should deserve zero tolerance from all of us”.

“I am confident that all of us working together will rise to the occasion and face these challenges in a manner befitting the reputation of this esteemed organisation,” Patel said in an email to the RBI staff. “Let me emphasise that one thing we should all zealously guard is the integrity and reputation of our organisation and any act belittling the same should deserve zero tolerance from all of us,” he said on the demonetisation exercise.

“During the year gone by, we have continued our efforts at restoring macroeconomic stability in the economy. While the policy actions have already shown positive effects, nevertheless, they are work in progress and need to be fine-tuned constantly to keep pace with the challenging environment,” Patel said.

The RBI had faced flak after the government announced its decision to withdraw Rs 500 and Rs 1,000 notes on November 8, 2016 and the way the exercise was handled by the government and the central bank. This has led to people such as former Prime Minister Manmohan Singh (himself a former RBI chief), former finance minister P Chidambaram, and former RBI Governors Y V Reddy and Bimal Jalan raising concerns relating to the damage to the RBI’S “credibility” and talking of the “institutional damage” it has “suffered” in the process.

Last week, Reserve Bank employees had taken strong exception to the 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”.

In a letter to RBI Governor Urjit Patel, the United Forum of Reserve Bank Officers and Employees, 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 Forum’s letter followed 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 which co-ordinate the officers and other employees.

Refuting allegations of interference by the RBI union, the finance ministry had said the government fully respects independence and autonomy of the RBI. “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 last week.