Puliyabaazi

The tussle between the Reserve Bank of India and the Union government has only intensified over the last two years. Governor Urjit Patel resigned in December 2018 and Deputy Governor Viral Acharya resigned earlier this week. Though both of them cited personal reasons there are speculations that the stand-off related to excess funds on RBI’s balance sheet had some role to play. Now there’s nothing new about tensions between a government and a central bank but what’s new is the bone of contention itself because it involves surplus funds rather than disputes over interest rates. There are no set templates from other countries to be followed here. Many central banks are yet to narrow down on the best possible use of such surplus funds and hence the RBI has constituted a committee under former Governor Bimal Jalan to recommend the way ahead. So we took a step back and tried to: explore the history of India’s Reserve Bank, uncover the relationship between the Reserve Bank and the government, and ideate on possible