Wanted: An independent, accountable RBI
As an institution, RBI is known for its impeccable integrity and intellectual honesty but not necessarily for pushing things in a time-bound manner. Many also feel it lacks accountability. Apart from ensuring price stability with one eye on economic growth, Governor Raghuram Rajan may need to look at some of the structural issues within the RBI bureaucracy.
A few years ago, the head of a private bank had to approach a deputy governor of RBI as the central bank had refused to clear his salary structure for over six months. Under the norms, the salaries and bonuses of the chief executive officers (CEOs) of private and foreign banks need the clearance of the regulator. RBI has every right to say no to anybody, but the practice is to not clear these files for months without assigning any reason. Read More