Former RBI Governor YV Reddy pitches for autonomy of central bank

By: | Published: February 9, 2019 5:24 AM

Reddy said, “We are going through confusion in search of a new ideal for a central bank and it has to be ideal for our circumstances. The future of central banking everywhere depends on when and how the confusing era in regards to central banking ends.

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Former governor of the Reserve Bank of India (RBI) YV Reddy has said the central bank has done well whenever it has the liberty to think globally, advise independently and act in the domestic context.

Reddy said, “We are going through confusion in search of a new ideal for a central bank and it has to be ideal for our circumstances. The future of central banking everywhere depends on when and how the confusing era in regards to central banking ends.

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“Further, the immediate future of central banking in India depends not only on how its equips itself to face the complex unclear challenges, but also on the manner in which the current concerns relating to fiscal management, public sector, public sector ownership, external sector balance and coordination functions are resolved by the government,” Reddy said.

Quoting late CD Deshmuk’s 1948 talks, Reddy said it is not the theoretical constitution of the institution that matters, but the spirit in which the partnership between the Ministry of Finance and the bank is worked. The success of the partnership will, in the ultimate analysis, depend on the manner in which the government desires to be served and provides opportunities accordingly.

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