PM Modi government trying to capture RBI: Chidambaram

Section 7 of the RBI Act gives special powers to the government to issue directions to the RBI governor on issues of public interest.

Published: 08th November 2018 07:36 PM  |   Last Updated: 08th November 2018 10:47 PM   |  A+A-

Senior Congress leader and former finance minister P Chidambaram addresses a press conference on the second anniversary of demonetisation. (Photo|PTI)

By PTI

KOLKATA: Former finance minister and Senior Congress leader P Chidambaram on Thursday attacked the Narendra Modi-led central government, claiming that the ruling party has packed the RBI board with hand-picked nominees and may demand Rs 1 lakh crore from the apex bank in an election year.

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Speaking at a press conference here on Thursday, Chidambaram called November 19 as the 'day of reckoning' when an RBI board meeting is scheduled and the Centre is likely to evoke Section 7 of the RBI Act, wherein it can issue orders to the otherwise independent body.

"The government wants to increase expenditure in an election year and has demanded Rs 1 lakh crore from the RBI reserves. In this situation, the RBI governor is left with two options - either to transfer the money or to resign. Whichever option is taken by the Governor, it will irretrievably damage the credibility and reputation of the RBI. It will also mean the capture of the RBI by the government. One more crucial institution would fall from grace," he said.

On the second anniversary of demonetisation, Chidambaram termed the move the "most ingeniously designed official money laundering scheme". He added that the prime objectives of demonetisation, as stated by Prime Minister Narendra Modi, had failed. 

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