Former Finance Minister P Chidambaram has accused the government of trying to turn the Reserve Bank of India into a “board-managed company” in the wake of Governor Urjit Patel's surprise resignation.
“The government's intention is to one: convert the RBI to a board managed company," Chidamabaram told BloombergQuint in an interaction. “And two: immediately grab its surplus reserves to meet its fiscal deficit for the year and spend its way in an election year.”
Chidamabram said that the Narendra Modi adminstration's intentions are “not honourable” as they're trying to restrain the autonomy of the central bank. “Their intention is not to strengthen the independence of the central bank. Their intention is to capture, and when it's not possible to capture, overawe the RBI,” he said. “That's exactly what they've done. They've overawed the RBI, the governor has quit. The next appointment of the governor will reveal the true agenda of the government.”
Watch the interaction here:
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