A history of fissures: RBI versus the Centre

Osborne Smith (left) and Lord Willingdon.

Benegal Rama Rau (left) and TT Krishnamachari.

Manmohan Singh (right) and Pranab Mukherjee. Credit: PTI Photo/Atul Yadav

YV Reddy (right) and P Chidambaram. Credit: PTI Photo/Wiki Media Commons

DV Subbarao (left) and P Chidambaram. Credit: PTI Photo

Raghuram Rajan (right) and Arun Jaitley. Credit: PTI Photo

As the Reserve Bank of India (RBI) publicly locks horns with the Central Government, research into the functioning of the RBI reveals that fissures between the bank and the government date back to its inception in 1934. Here are some famous tussles:

Osborne Smith versus Lord Willingdon
Term: 1935-1937
In 1936, the first governor of the RBI Osborne Smith wrote that he was "sick to death" of the government's attempt to dominate the RBI. He also called the Viceroy a "weak ass".

Benegal Rama Rau versus TT Krishnamachari
Term: 1949-1957
Benegal Rama Rau resigned after a public feud with TT Krishnamachari, the then Finance Minister. The trigger for Rau's resignation was an announcement by Krishnamachari about the stamp duty on bills.

Manmohan Singh versus Pranab Mukherjee
Term: 1982-1985
Former Prime Minister Manmohan Singh’s daughter Daman Singh, in her book 'Strictly Personal: Manmohan and Gursharan' quotes him as saying he had serious disagreements with Pranab Mukherjee when he was the RBI Governor.

YV Reddy versus P Chidambaram
Term: 2003-2008
Former RBI Governor YV Reddy contemplated resignation twice as he shared an uncomfortable relationship with then Finance Minister P Chidambaram. The central issue concerned opening the banking system to foreign ownership.

DV Subbarao versus P Chidambaram
Term: 2008-2013
D Subbarao batted for the central bank's autonomy with both P Chidambaram and Pranab Mukherjee during their terms as Finance Minister. In his book 'Who Moved My Interest Rate?: Leading the Reserve Bank of India Through Five Turbulent Years', Subbarao addressed his differences with the UPA government. Subbarao, however, still appears to share a good equation with Chidambaram, who was the chief guest at his IIM-Bengaluru book launch.

Raghuram Rajan versus Arun Jaitley
Term: 2013-18
One of the most flamboyant governors of the apex bank, Rajan disagreed with Finance Minister Arun Jaitley on a number of issues. BJP MP Subramanian Swamy was a vocal critic of Rajan, even asking for Rajan's removal from the post before his tenure ended. The government did not give him an extension amid reports that those in power were not happy with Rajan's interest rate policy and his public criticism of the BJP government on social issues.