RBI frequently about-turned under Urjit: Ex-finance Secy
Citing some instances of about-turns by the then RBI Governor Patel, Garg in his book said, RBI had done so on the electoral bond issue and it had so in case of setting up of Payments Regulatory Board (PRB).
Urjit Patel
NEW DELHI: Under Urjit Patel, the then RBI Governor, the central bank had a habit of making complete about-turns on various issues, including electoral bonds and digital payments, former finance secretary Subash Chandra Garg said in his book titled 'We Also Make Policy: An Insider's Account of How the Finance Ministry Functions.'
Citing some instances of about-turns by the then RBI Governor Patel, Garg in his book said, RBI had done so on the electoral bond issue and it had so in case of setting up of Payments Regulatory Board (PRB). RBI also made unilateral decisions like ordering complete data localization for participation in the payment system, Garg wrote in the book which will hit the stands on October 1.
"We humbly pointed out to RBI that the report (on PRB) was unanimous. If there was any dissent, it should have been made before the report was finalized. We would have gladly included the dissent note as part of the report and provided a rejoinder to the points raised by RBI," the book read.
However, claiming inaccurately that its representative had submitted a dissent note on certain recommendations of the committee, RBI posted a dissent note on its website by way of a press release on 19 October 2018, it said. The 2007 PSS law remains unamended. The government has still not notified the PRB as created by the Finance Act 2017.
"The government did not take any action on the recommendations of the inter-ministerial group that I headed. These recommendations had the potential to transform the payment architecture, infrastructure and institutional arrangements in the country. Though RBI is acting upon some of the recommendations made, India still has not institutionalized a good experimental regulatory sandbox," it said.
Recently, in a paper issued by RBI, it said, it proposed opening up the payment space to NBFCs and other private entities. Patel's reluctance to part ways with reserves of the central bank for transferring it to the government of India prompted the Prime Minister Narendra Modi to compare him with a 'snake who sits over a hoard of money'.
