Reserve Bank of India’s (RBI) former Governor Raghuram Rajan gave cricketing analogy for the Central Bank’s operation board, asking it to play like Rahul Dravid and not like Navjot Singh Sidhu.
Talking about the alleged rift between the government and RBI, Rajan in an interview to Economic Times strongly advocated for the autonomy of the Central bank stating that it is in the interest of the country that both sides respect each other`s intent and autonomy.
Expressing his concern regarding the RBI board’s role change in current times, Rajan asked it “to play a Rahul Dravid, to coach in some sense” but “not to make operational decisions and certainly not be loud like Navjot Sidhu”.
In another interview to CNBC-TV 18 telecast, Rajan compared RBI’s position to that of a “Seat Belt,” without which one can “get into an accident’.
The rift between the RBI and the government has spilled into the public domain after Deputy Governor Viral Acharya said last month that undermining central bank independence could be “potentially catastrophic”, indicating the authority is pushing back against government pressure to relax its policies and reduce its powers ahead of a general election due by May.
In counter statement Finance Minister Arun Jaitley criticised the central bank for failing to check indiscriminate lending during 2008 and 2014 that has led to the present bad loan or Non-Performing Asset (NPA) crisis in the banking industry.
Rajan has commended Acharya for warning of risks stemming from government meddling of central bank affairs. But he also said the RBI could inject liquidity to ease any cash crunch at financial institutions, indirectly supporting the governments call for a liquidity window for NBFCs.