The government “fully respects” the Reserve Bank of India’s autonomy and consults it according to the law, the finance ministry has said after the central bank’s employees alleged the institution’s image has been “dented beyond repair”.
“Consultations mandated by law or as evolved by practice should not be taken as infringement of autonomy of RBI,” said the ministry in a press statement on Saturday.
At least three employees’ unions, in a letter to RBI governor Urjit Patel, had on Friday accused the government of “impinging on RBI autonomy” with the November 8 announcement of scrapping Rs 500 and Rs 1000 notes.
“May we request that as the governor of RBI, its highest functionary and protector of its autonomy and prestige, you will please do the needful urgently to do away with this unwarranted interference from the ministry of finance, and assure the staff accordingly, as the staff feel humiliated,” the unions said.
“It’s (the RBI’s) autonomy and image have been dented beyond repair,” added the letter, which was signed by Samir Ghosh of All India Reserve Bank Employees Association, Suryakant Mahadik of All India Reserve Bank Workers Federation, CM Paulsil of All India Reserve Bank Officers Association and R N Vatsa of RBI Officers Association.
The RBI was widely criticised for frequent rule changes during the 50 days of the demonetisation drive, which aimed to crack down on black money and corruption, but later was promoted to make the Indian economy cashless and digital.