Mumbai : Reserve Bank of India (RBI) employees will go on a day’s mass casual leave on November 19 to protest the government’s move to take away from the central bank some of its vital operations “in the name of the draft financial code and legislative reforms”.
“The cease-work programme is intended, inter alia, to strongly oppose the government of India’s current moves to cripple RBI in the name of the draft financial code and legislative reforms,” an United Forum of Reserve Bank Officers and Employees release here said. “The Finance Ministry is reportedly giving final shape to shift government’s debt management functions from RBI to the proposed Public Debt Management Agency (PDMA), which will also henceforth function as depository of government securities (G-Sec), thus taking away from RBI some vital operations having relevance to money market as well,” it added.
Samir Ghosh, convenor of the United Forum of RBI Officers and Employees, told reporters that the mass leave call for agitation has been given to press for saving the RBI and settling of pension issues. “With the proposed mechanism of Monetary Policy Committee (MPC), the government plans to intervene and themselves decide the monetary policy which has been the exclusive jurisdiction of RBI so far,” he said. The draft Indian Finance Code (IFC) has proposed re-aligning of the powers of the RBI vis-a-vis the finance ministry through the composition and functioning of the monetary policy committee that would be responsible for setting rates.
“The objective of monetary policy is to achieve price stability while striking a balance with the objective of the Central government to achieve growth,” said the revised IFC, proposing to do away with the veto power of the RBI governor for determining policy rates, instead suggesting a decision by a majority vote. This is a big shift from the current practice where the RBI governor decides on the interest rate, although he consults the Technical Advisory Committee on policy rates that includes the Bank’s deputy governors as well as experts and economists.
The RBI staff has also been demanding improvement in pension conditions, under which pensioners are not entitled to periodic updation of pension. Updation of pension was granted to pre-2002 retirees by the RBI Central Board, but the government withdrew it unilaterally, Ghosh said.