Crucial test for Das on RBI autonomy

The newly appointed Reserve Bank of India (RBI) governor Shaktikanta Das. File photo

The newly appointed Reserve Bank of India (RBI) governor Shaktikanta Das is set to face a litmus test, his first, on central bank’s autonomy, as its central board has commenced the crucial meeting in Mumbai on Friday.

According to the highly-placed sources, the government appointed nominees and the RBI’s deputy governors are focussing on different priorities during the meeting, the second in a month's time.

While the central bank’s nominees on the board, which includes Das and four deputy governors, are expected to focus on the concerns of liquidity, while government's nominee directors on the RBI’s central board are expected to push for the governance reforms.

Earlier, in his first press conference after taking over as the RBI’s 25th Governor, Das had said, “I will do everything to uphold core values and the autonomy of RBI. RBI has the core competence to deal with any technical or monetary issues.”

However, Das, who is seen as the face of failed demonetisation drive by Prime Minister Narendra Modi, also said that he is open for a free-wheeling discussion with the government over various issues. "Government is not just a stakeholder but is running the country and RBI. I think all issues can be resolved through discussion," he had said.

During the demonetisation era, Das used to hold daily pressers on behalf of the government, updating people about daily tweaking that the government used to do in the rule regarding cash withdrawals. Among the many controversial plans during that phase in 2016, Das had announced a proposal to put indelible ink on the index fingers of people to prevent them from exchanging old currency multiple times beyond specified limits. Following a nationwide outrage, the move was later withdrawn.

Many people see Das as the proxy of the government in RBI.


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At the earlier central board meeting held on November 19, the government nominees on the RBI board — Financial Services Secretary Rajiv Kumar and Economic Affairs Secretary Subhash Chandra Garg — had pushed a proposal to consider governance reforms in RBI, driven from the idea that the government has more say in apex bank’s functioning.

The markets and key stakeholders are keenly awaiting the decisions of the central board, which are expected to emerge by this evening.

The BSE Sensex has been trading cautiously ahead of the meeting and showed a slender rise of 25 points at 35,955.38 at 2 pm.

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Crucial test for Das on RBI autonomy

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