Incidentally, both Subbarao and Chaudhuri are set to leave their respective offices in September
.......Chaudhuri’s latest outburst against RBI also stems from his concerns about liquidity. He has said RBI should have hiked the interest rates to raise money market rates instead of tightening liquidity. By tightening liquidity, RBI has been non-transparent in its approach. Globally, central banks only raise interest rates if they want to jack up money market rates. He said this as SBI chairman and not on behalf of the banker’s lobby—the Indian Banks’ Association—of which he is the honorary secretary. RBI has many tools it can use to raise rates and the kind of transparency that Chaudhuri expects may not necessarily be a virtue for any central bank. I wonder why Chaudhuri gets so upset with RBI measures and why he is so openly critical of them. Should a commercial banker be so open about criticizing RBI? What will happen if all other bankers take a leaf out of Chauduri’s book and start screaming from the rooftops?.............
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