RBI staffers say Finance Bill will curtail, cripple functions

Fearing curtailment of RBI's authority, a group of its officers and employees have written to MPs and chief ministers of various states regarding Budget proposals in the Finance Bill.

The letter by the Forum, 'United Forum of Reserve Bank Officers & Employees', contended that the Bill had provisions with far reaching implications, and if implemented, would cripple the functions of the central bank.

It said the proposed changes in the Bill would also curtail the authority of RBI, render it totally ineffective in discharging the responsibilities regarding monetary policy, financial stability and inflation-targeting.

The Forum urged the parliamentarians to take up the matter with the government "in the best interest of the country."

Taking away government debt management from RBI would also affect the interests of the state and country's federal structure, the letter said.

The Forum has also sent letters to the chief ministers of various states to apprise them of the peril, it said.

Some proposals in the Bill included changes in the RBI Act of 1934, repeal of the Government Securities Act of 2006, amendments to the Securities Contract (Regulation) Act of 1956 and FEMA.