KOCHI: On the eve of the crucial Reserve Bank of India (RBI) board meeting on Monday, former Finance Minister Yashwant Sinha has asked its Governor Urjit Patel to quit if the Government invokes Section 7 of the Banking Regulations Act to raid the reserves of the central bank.
Speaking at the ‘Hot Seat’ programme with the All India Professional Congress-Kerala (AIPC) president Mathew Kuzhalnadan on Sunday evening at the Bolgatty Palace here, Sinha said the government eyeing the RBI reserves is completely wrong.
“These reserves are only notional. They are not money in hand. They are required to meet the liabilities of the RBI. For every foreign exchange that comes in, the RBI gives out rupee equivalent. Tomorrow, if there’s a contingency, the RBI needs this money. I don’t think there is anyone in the government who understands this,” he said.
The RBI board is meeting on Monday to discuss a host of issues, amid controversy over the government move to take some of its reserves.
Terming that taking the RBI reserves as the “most illogical thing that the government is planning”, the former Finance Minister said issuing the order under Section 7, which directs the central bank to do as the government wants, is the “ultimate humiliation of the RBI”. He said even if the government has started consultation, which is required then the RBI Governor should resign. “Having surrendered in the question of demonetisation, now the existence of RBI, as we know it all these years, is under threat. Why should Urjit Patel preside over the liquidation of RBI. He has no option but to go,” Sinha said.
Stating the Modi government was a total failure on a host of issues, especially the economic management, Sinha, who quit the BJP in April, said it was “greed” that led the Prime Minister to announce the demonetisation in November 2016. Not one of the four stated goals of the ‘note ban’ viz. tackling corruption, black money, terrorism and counterfeit notes succeeded, he said.
Replying to a question, he said all the black money in the system returned to the banking system and now fresh black money is being created. On the issue of bad debts in the banking system, Sinha said Finance Minister Arun Jaitley in the Economic Survey said in 2014 the NPAs stood at Rs 2.05 lakh crore. Now, he says that was an incorrect figure, and the actual figure was Rs 8.5 lakh crore. This is misleading the Parliament, and it should invite breach of privilege notice, Sinha said.
Mincing no words in his criticism of Prime Minister Narendra Modi, he said all institutions and conventions are directly under attack from the Prime Minister. He mentioned how the Aadhar Bill was passed as Money Bill, the renaming spree happening in the country etc. “The government is getting away with murder,” he said.