New Delhi (Sputnik): The Reserve Bank of India on Tuesday night appointed S. Gurumurthy and Satish Marathe as directors. Gurumurthy, a member of the BJP's sister organization Swadeshi Jagaran Manch, has been credited by some as the intellectual force behind Narendra Modi's demonetization experiment two years ago. He has been a staunch opponent of several reform measures suggested by Western financial institutions.
Satish Marathe has vast experience in the cooperative sector. In his youth, Marathe was the treasurer of the ABVP — the student wing of Modi's Bharatiya Janata Party (BJP).
The Indian government is appointing 10 non-officio directors to the central board of the Reserve Bank of India. But this is the first time that persons with strong political affiliations have been nominated to the post.
The move sparked accusations that the ruling BJP is trying to influence the autonomy of the central bank, which sets interest rates, regulates banks and most importantly, oversees the country's bankruptcy code.
People thought Modi will not commit any more disasters after #Demonetisation and then he again proved them wrong by appointing S Gurumurthy at RBI Board!— Arun Shourie Unofficial (@FeignShourie) August 8, 2018
"Raghuram Rajan (former RBI governor) destroyed the RBIs independence by making it subservient to global thought rather than pursue India-centric solutions. The RBI can't now move away from that line for fear of going against global financial opinion. RBI has lost its capacity to think for India," Gurumurthy tweeted last month.
He opined on Twitter that the "RBI ignored four differentials: non convertibility of Rupee, no foreign control of Indian banks, govt control of 70% bank deposits, 25% bank deposits being in govt securities. No banking system has this kind of protection. Still, RBI imposes basel norms totally unsuitable to India."
When contacted by Sputnik, Gurumurthy did not respond to a request to comment on his appointment. But he wrote on twitter: "This is [my] first directorship ever. Never accepted any private or PSU [state-owned company] directorship. Not even audit of PSUs or Pvt cos. Wanted to be free to speak. But when pressure built up, I am needed to do something in public interest, I had to accept."
Story of my appointment as director RBI. This is the first directorship ever. Never accepted any private or PSU directorship. Not even audit of PSUs or Pvt cos. Wanted to be free to speak. But when pressure built up I am needed to do something in public interest I had to accept.— S Gurumurthy (@sgurumurthy) August 8, 2018