Shaktikanta Das brings in historic change; RBI meetings will now be more trasnparent

FE Online
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In a bid to improve public awareness about the functioning of RBI and bring accountability to the directors, governor Shaktikanta Das has ordered to disclose minutes of the meeting of RBI central board directors. The central bank on Monday released details of the meeting held between RBI central board members held on October 11, 2019, in Chandigarh. RBI central board meetings have been contentious in the recent times, especially considering that then governor Urjit Patel had resigned for the very reason of alleged difference of opinions on policy matters with the government.

This major change in RBI’s working marks yet another landmark for the governor Shaktikanta Das who was appointed to replace Urjit Patel and the jury was out on him to maintain RBI’s sanctity. RBI routinely publishes the minutes of the Monetary Policy Committee’s bi-monthly meetings on monetary and credit policy. However, it is only now that the central bank will release the minutes of the meetings of the central board, which has members representing the government as well.

The minutes of the Chandigarh meeting show that the central Board discussed several issues at length varying from the regulatory and supervisory structure of commercial and cooperative banks to the state of NBFCs in the country. "It has been decided to place the minutes of the meetings of the Central Board on the RBI's website in terms of provisions of Section 4 of the RTI Act, after appropriately severing information that is permitted to be severed as per the Act," the RBI said.

The minutes established that the matter of PMC bank collapse was discussed extensively in the meeting. "In future, the minutes will be placed on the RBI website within two weeks from the date of its confirmation in the next meeting of the Central Board and on being signed by the chairman in the same meeting. The RBI has been, over the years, taking steps to enhance transparency with regard to its functioning." the RBI said.

The step to publish minutes of the meeting may also help the government and the RBI to preempt difficult questions on contentious issues such as transfer of surplus RBI capital reserves to the government. The RBI had recently given Rs 1.76 lakh crore to the central government to bridge the expenditure and earning gap, which earned it critique and scrutiny over its independence as a statutory body.