Friday, November 30, 2012

Why do ministries interfere with the functioning of statutory bodies?

.....Statutory bodies like the RBI should not be made subservient to the whims and fancies of officials in ministries for exercising the powers they are expected to exercise as part of their mandated functions. The RBI has faced problems on such issues relating to banks earlier due to blurred clarity in powers and interpretation of law. Perhaps, the RBI has learnt from the recent experiences while handling new generation private sector banks which did not survive and the interests of the clientele had to be protected by the regulator with GOI support. Last ten years or so, the RBI has been loitering around North Block for permission to continue a pension updation granted by RBI in exercise of powers available under the Reserve Bank of India Pension Regulations which is being questioned by the finance ministry that has interpreted the pension regulations differently. An amendment to RBI Pension Regulations made to conform to the GOI interpretation of the regulations is pending with finance ministry for more than a year......

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