 "RBI has de facto independence: Top 5 quotes of Raghuram Rajan on monetary policy committee")
RBI Governor Raghuram Rajan today clarified on the recent controversy over the revised draft of the Indian financial code seeking to curtail the central bank Governor's powers on interest rates. Trying to put the controversy at rest, Rajan said that there are no differences between the RBI and the government and one should wait for the goverment to release the details before arriving at any conclusions. However, he did reiterate that the independence of the institution is a de facto reality.
Here are the top 5 quotes of the RBI Governor on the controversy
1) "Govt has a right and there is a clause in the RBI act where they can give directions to the RBI. But that has never been invoked. That shows that we have de facto independence"
2) "There has been a healthy respect between the govt and the central bank. Central Bank ultimately decides the course of monetary policy"
3) "Currently the situation is that the governor has a veto. All advice is only advice, ultimately the decision is the governor's, so if we continue to retain a veto, it doesn't change the current situation... it only maintains the status quo"
4) "The govt, RBI has reached a broad understanding on what the MPC should look like. MPC details will be made public when the government is comfortable."
5) "We have been enthusiastic supporters of a monetary policy committee"