RBI listens to government, but takes decisions only for national interest: Raghuram Rajan


New Delhi, Nov 6 (IANS): Acknowledging that the Reserve Bank of India (RBI) listened and considered all proposals of the Central government, former RBI Governor Raghuram Rajan said the apex bank always took decisions based on national interests.

Speaking to business news channel CNBC-TV18, Rajan said the central bank after listening to all the proposals and issues of the government, gives its best "professional" reply.

"It has a responsibility to fulfil. It has to listen, of course, but at the end, it has to make a decision because ultimately it has that responsibility," he said.

On reports that the government might have imposed Section 7 of the RBI Act curtailing its autonomy, he said it is unlikely that any such step has been taken, suggesting that both the government and the RBI should respect each other's motivation and thoughts.

"I think certainly it would be best if both sides respected each other's motivation and thoughts... the RBI after listening to the government has provided the best professional answer... and historically it has done that," he said.

"I have no doubt it is doing that today."

His statement assumes significance amid recent signs of a rift between the government and the bank. RBI Deputy Governor Viral Acharya in October during a speech said the government might face markets' wrath if it was seen eroding the central bank's independence.

In his interview with the news channel, the former Governor described RBI as a "seat belt", which would save the "driver" -- the government -- if an accident occurs.

"The RBI is something like a seat belt, the driver being the government... there could be a possibility of not putting on a seat belt. But of course, if you do not put on your seat belt, (in case of an accident), the impact could be quite severe," he said.

  

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Comment on this article

  • Mamatha, Manglore

    Wed, Nov 07 2018

    Giving crores of rupees loan on phone call by politician again and again knowing that party is not repaying was in national interes Mr Rajan.?

    DisAgree Agree [1] Reply Report Abuse

  • Indian Aam Admi, Kadaba/Mangaluru

    Wed, Nov 07 2018

    How long Indians will dance to the tricks, when we all have seen Supreme Court's Senior Judges going out to people, the CBI with other investigating agencies in question and lately the most worrying RBI & Banking system crisis. Where all these lead to?? Its only left to all of us, the people of this country, to stand up honestly for the sake of our own next generation.

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  • Vincent Rodrigues, Katapadi/Bangalore

    Wed, Nov 07 2018

    RBI is the care taker and custodian to public money should not be a;;owed to meddle by any authority.

    DisAgree [1] Agree [1] Reply Report Abuse

  • SMR, Karkala

    Wed, Nov 07 2018

    The Central Information Commission (CIC) has also asked the Prime Minister’s Office, the Finance Ministry and the Reserve Bank of India (RBI) to make public the letter of former RBI governor Raghuram Rajan on bad loans.
    "The RBI shall disclose the bad debt details of defaulters worth more than ₹1,000 crore at the beginning, of ₹500 crore or less at a later stage within five days and collect such information from the banks in due course to update their voluntary disclosures from time to time as a practice under section 4(1)(b) of the RTI Act,".

    What action did Prime Minister Modi government take even after the disclosure of economic offenders who escaped after looting the banks?
    Jai Hind

    DisAgree Agree [2] Reply Report Abuse

  • Valerian Menezes, Kota

    Tue, Nov 06 2018

    Of course, unlike during demonetisation which is the total aberration of its policy, the RBI wants to assert its autonomy now. That is good for the economy.

    DisAgree Agree [1] Reply Report Abuse

  • Pais, Mangalore

    Tue, Nov 06 2018

    Quote" Wise men speak because they have something to say; Fools because they have to say something"

    Wise and able men such as Raghuram Rajan and our Honorable Ex PM are the most experienced economists and when they speak they speak prophecies that become factual..

    Unlike the Fools (Jootley & Co) from the Pee party who only speak as they have to say something and know nothing...

    DisAgree Agree [12] Reply Report Abuse

  • RkR, Mangalore/ Dubai

    Tue, Nov 06 2018

    Money market, equity market, forex market n credit will make blunder.

    DisAgree Agree [2] Reply Report Abuse

  • Sahil, Mangaluru

    Tue, Nov 06 2018

    Even urgit Patel relatives of?but still RBI kissI ka baap ka maal hai kya?

    DisAgree Agree [6] Reply Report Abuse

  • Swamy, Mangalore

    Tue, Nov 06 2018

    If that was the case today BJP would have won a overwhelming victory in Karnataka. As of now even if BJP goes to heaven and brings Lord Rama down to earth still people will not vote them because they will think it's fake and fooling them. BJP your trick bag is empty now sadly you are not capable of doing any real good tricks either.

    DisAgree Agree [21] Reply Report Abuse

  • KRPrabhu, Mangalore/Bangalore

    Tue, Nov 06 2018

    What is this new loan scheme called 59 minutue up to one crore Loan for MSME recently launched by the PM?Whether RBI has sanction for such a loan scheme?What would be the fate of such loans in future vis a vis NPA s?

    DisAgree [1] Agree [16] Reply Report Abuse

  • HENRY MISQUITH, Bahrain

    Tue, Nov 06 2018

    Diwali cracker for MSME. In India loan is always gift. BJP will give one crore loan gift and future govt. will gift them by waiver scheme.

    DisAgree Agree [9] Reply Report Abuse

  • RkR, Mangalore/ Dubai

    Tue, Nov 06 2018

    @ Henry that how the system works- called Bond market Or Debt market
    Outcomes z worse

    DisAgree Agree [1] Reply Report Abuse

  • Jenifer, Mangalore

    Tue, Nov 06 2018

    Let there be one institution that maintains its integrity. Not surrender itself to the dictator duo.

    DisAgree Agree [16] Reply Report Abuse

  • Jossey Saldanha, Mumbai

    Tue, Nov 06 2018

    Thank God or else these Rascals will sell India & disappear in London ...

    DisAgree Agree [24] Reply Report Abuse


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Title: RBI listens to government, but takes decisions only for national interest: Raghuram Rajan



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