The Major functions of Reserve Bank of India are,
- Issue of currency notes
- Financial supervision of banks and NBFCs as regulator
- Regulator of payment and settlement systems
- Banker and debt manager to Govt
- Manage foreign exchange
- Bankers Bank – lender of last resort
- Developmental Role
The RBI has failed in all aspects under Mr.Shaktikanta Das. While Dr.Raghuram Rajan left because the ruling party and RSS did not want him to continue, Dr.Urjit Patel who was brought by this Govt with his background of a stint with Reliance left because even he couldn’t act as a stooge of the Govt as he understood his role as a protector of the Nation. Dr.Viral Acharya, Dy. Governor left, as he could not work under the pressure of the Govt and it’s nominees in the Board. Under Mr.Shaktikanta Das who has no economic background, who defended demonetization which has ruined the economy, RBI has failed in every function.
- Rs.2000 Notes are not available and one Bank has publicly told they will not load the Notes in ATMs. During demonetization one former Finance Minister stated that he has doubts that fresh currency went to some individuals without going to Banks, directly from the Currency Printing Press. It appears true because so much of cash flows during elections and till date nobody has been convicted who were arrested for having crores of Rs. 2000 Notes during demonetization.
- RBI has miserably failed in supervision and monitoring in spite of the enormous power it has. It has also failed in controlling Bank charges which is bleeding the customers from lower income group badly.
- As Banker and Debt Manager RBI has not been able to fulfill the task because of which Govt is borrowing heavily, has become dependent on IMF, World Bank. ADB etc and Govt is selling the family silver, the Public Sector Units.
- Electronic frauds and other frauds using the UPI has increased astronomically and RBI is not able to do anything, as a regulator of Payment settlement systems.
- RBI could have managed foreign exchange better as the price of petroleum products came down and NRI remittances increased.
- The failure as banker to banker is visible in many cases including PMC Bank and Yes Bank Crisis. By giving Rs. 1.76 Lakh cores to Govt, RBI has become weak and it keeps on floating bonds, for Govt but RBI is not able to prevent failures.
- RBI has forgotten its developmental role. The research wing has become routine and RBI has not been able to provide alternatives due to which crisis after crisis is coming. It also permitted the Development Finance Institutions to become Universal Banks and privatized them. RBI is not restoring DFIs in spite of many recommendations including Parliament Standing Committee.
The biggest failure is monitoring and supervision due to which the faith in the Banking system is going down. So Mr.Shaktikanta Das and his masters in the RBI Board must resign.
“With a gun a man can rob a Bank, with a Bank a man can rob the world” – Carter Glass
Thomas Franco, former General Secretary of All India Bank Officers Confederation