.........The dissenting notes have come from KJ Udeshi, former Deputy Governor, RBI, PJ Nayak, country head of Morgan Stanley (but formerly chairman and managing director of UTI Bank and joint secretary in the capital markets division of the finance ministry), YH Malegam, currently in the Board of Directors of RBI and JR Verma, the academic from IIM Ahmedabad..............
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No point in doing an MRI of FSLRC report or the dissenting notes. Application of ‘collective wisdom’ is conspicuous by absence in the whole affair. Some vested interests are itching for a truncated central bank with diminished role with no say in the non-bank financial sector, the government securities market and the foreign exchange market. Logically implying that RBI would have no say in the management of the exchange rate and thereby in the forex reserves. Add to this the Commission’s view on government debt management. The Commission opts for a separate Debt Management Office (DMO), totally separated from the RBI, which is the dispensation North Block has been trying to push and RBI has been resisting for valid reasons for a long time now.
Our finance ministry and FSLRC, ignore the evolution of the role of Reserve Bank of India and the care with which RBI has nurtured the financial sector concurrently successfully safeguarding GOI interests even in several areas which do not come under traditional central banking functions. When found necessary, at the appropriate time, new institutions were built by RBI in association with GOI to transfer responsibilities which either conflicted with its core functions or became unwieldy or unmanageably heavy.
Time is not opportune for dismantling or truncating RBI which is doing creditably well as is being admitted in several international forums. Any regulatory changes should be to consolidate and restate the roles so far evolved and should not be a tool for Finance Ministry or any government department to usurp powers or responsibilities now with statutory regulators.
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