The Hindu Business Line : Staff union concerned at apex bank's future

THE All-India Reserve Bank of Indian Employees' Association (AIRBEA), which is holding its 30th conference here, is worried about the future of the apex bank as an institution.

According to Mr Thomas Joseph, Secretary, AIRBEA, the "decimation process" in the bank had started in the late seventies. Department after department started disappearing, accompanied by flight of jobs on one pretext or the other. Government policies aided and abetted by the management have played havoc with the functioning of the institution.

The advent of globalisation further catalysed the dismantling exercise at RBI. "The developmental role of the apex bank in a developing country like ours has since been discarded. The bank is now sought to be restructured in the mould of central banks of developed countries, particularly the US, ignoring the state of the economy," Mr Joseph said.

The Narasimham Committee-I report suggested the creation of an independent outfit for taking over the job of supervision and inspection of the banking and financial sectors. The Narasimham Committee II extended it further, sermonising that the Reserve Bank be content with the exercise of monetary control only and that the inspection of the banking and the financial sector was better hived off.

The Ferguson Committee appointed by the RBI advocated downsizing of the institution to a third by as early as 2000 itself. The future of many departments is hanging in the balance. The numerous reforms undertaken in currency management have not brought the advantages to the public and the banks.

The association has been resisting the offensive unleashed against the central bank in the globalised era. It has in fact been campaigning for expansion of RBI functions and its adequate coverage to facilitate the efficient management of the fiscal and financial activities in the country.

It does not buy the specious argument that the central bank is overburdened with the function of retail banking and that it should confine itself to framing and implementing the monetary policy and controlling inflation, Mr Joseph added.

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