Accountant shaking up India’s central bank
To his supporters, new Reserve Bank of India (RBI) board member Swaminathan Gurumurthy is a philosopher who will set India on a path of self-reliance. His detractors paint him as an ideologue who has pushed the government into a series of policy blunders. What neither side disputes is that Gurumurthy, who joined the central bank’s board in August, is now one of the country’s most influential economic voices. A chartered accountant and commentator who has long had the ear of leaders of the ruling Bharatiya Janata Party (BJP), Gurumurthy is a leading figure in the Rashtriya Swayamsevak Sangh, the parent organisation of the BJP where Prime minister Narendra Modi began his public career.
The former co-convener of the Swadeshi Jagran Manch, the economic wing of the RSS, has shaken up the central bank, say those who know him and are familiar with recent board meetings.
At both the October and November board meetings, Gurumurthy pressed members to do more for smaller enterprises, according to an official who has known him for more than three decades and is aware of the board discussions.
The bank’s statement after its last policy meeting on November 19 said it would “ease liquidity for the financial sector and increase credit to small businesses”. “He has his own ideas and he makes his points very forcefully,” the official said.
Gurumurthy’s appointment is being seen by nationalists as a major victory in its quest to rid the RBI and the government of “foreign” elements. But his presence is also worrying investors and analysts, who fear for the RBI’S independence.
Gurumurthy, in a November speech — his first since joining the board — he said globalisation was now “irrelevant”, praising US President Donald Trump for his protectionist trade policies.
Groups have cheered him for turning up the heat on RBI Governor Urjit Patel, who it was reported came close to resigning in November due to a rift between the bank and the finance ministry.
“We are very happy about it,” said Ashwani Mahajan, who worked as Gurumurthy’s fellow co-convener at the Manch, and who has known him for more than 25 years. “The board, which only used to be a rubber stamp, has started discussing these issues.”
His call for public sector banks to loosen their lending requirements to small businesses closely aligns with the wishes of the government, which wants to keep India’s economy running ahead of a key series of elections, despite a pile-up of bad debts at the banks.