Modi govt destabilising RBI, says Deve Gowda

Former prime minister H D Deve Gowda said on Saturday that the BJP government at the Centre was interfering in the affairs of the Reserve Bank of India (RBI), damaging its autonomy, due to which an economic instability has arisen in the country.

"The Modi government has destabilised the RBI, an autonomous institution, and tried to treat it as a department of the government. There was negligence in implementing suggestions of finance advisors," he said.

Gowda told mediapersons here that banks were misused to grant loans to those who are close to people in power, though they are ineligible. Such things happened under UPA regime too, the former prime minister said.

He was replying to a query on the banking sector and economy in the country, including the crisis in Yes Bank.

The Modi government tried to have direct control over the RBI. When Raghuram Rajan was the RBI governor, he resisted government’s interference.

Irregularities took place during the demonetisation of high denomination currency notes. Excessive loans were given and the autonomy of RBI was threatened, he said. The Centre should take steps to revive banks that are in trouble and to create jobs, he advised.