Recently the Central Bureau of Investigation (CBI) arrested a few of RBI employees under the charges of helping crooks in the illegal exchange of demonetised currency. Taking a serious note of this lately, the RBI Governor, Dr. Urjit Patel issued a stern warning to RBI employees asking them not to do anything that may hurt the reputation of the central bank.

The RBI Governor was extremely vocal about the topic and sent out an open message to his colleagues. “While on the subject, let me emphasise that one thing we should all zealously guard is the integrity and reputation of our organisation and any act belittling the same should deserve zero tolerance from all of us.”

Unfortunately, the RBI Governor didn’t realise that many have already called RBI’s reputation and integrity into question. Perhaps, he just preferred to remain silent about it. After all, he can’t say something that will place the Government in an awkward position.

Many economists, including some of India’s former RBI Governors, believe, RBI’s reputation is at risk due to flip-flops in implementing the demonetisation policy. The RBI has chosen to remain tight-lipped on almost every question on demonetisation.

The press and Right to Information (RTI) activists have raised many questions seeking the RBI’s swift response. However, contrary to expectations, the RBI has dodged most questions or cited technical compulsions for not offering a response. For example, out of 11 questions, Bloomberg News raised between December 8, 2016 and January 2, 2017; RBI answered only 5. Surprisingly, its reply to the same questions asked at different intervals was inconsistent.

Shockingly, it has not determined the cost it incurred on printing new notes. Apparently, it has transferred such difficult questions to agencies that manage printing presses. Two organisations that undertake the responsibility of printing currency notes, Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) and the Security Printing and Minting Corporation of India (SPMCIL), have no idea about the cost of printing new currency.

Wishy-washy responses to the RTI queries filed by The Hindu BusinessLine on this matter speaks volumes. Either the central bank has shifted its base to some banana republic and has stopped bothering about the economy or it’s being compelled to dodge questions, gulp insults and criticisms yet keep mum—a diplomatic, political cost of the decision of demonetisation.

One more thing that has come forth is—RBI Board didn’t conduct any discussions on demonetisation before November 8, 2016. In contrast, RBI had clarified that the Central Bank was taken into confidence for demonetisation and it was in favour of such a gigantic move. 

But such equivocal stance raises more questions than it clarifies.

Chances that the RBI has suddenly become irresponsible is highly unlikely. Let's keep in mind, the RBI Governor is answerable to the Government of India. Therefore, instead of raising questions about the credibility of India’s one of the most trusted institution, one should take exception to the Government’s position on the whole issue of demonetisation.

If you are a strongman—don’t worry we will get rid of you. If you are not so strong, never mind flip flops, be in the firing line and safeguard us, we will back you. Is this Government’s new found way of treating RBI governors?

Maybe or may not be. But RBI is at the receiving end for sure. 

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