11:12 GMT30 March 2020
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    The Narendra Modi-led government, in a decision that has piqued the attention of critics, has nominated two right-wing ideologues to the board of directors of the country’s central bank.

    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. 

    READ MORE: Economists: Monopoly of the Dollar to Be Replaced by Troika Including Euro, Yuan

    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. 

    In business circles, S. Gurmurthy's appointment to the central board of the RBI raised several speculations on the direction that the bank is going to take on several fronts. Gurumurthy is known to have questioned high provisioning norms and Basel Capital Adequacy Ratio (CAR) norms on several occasions in the past. He has also been a staunch opponent of foreign influence over the bank. 

    "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."

    READ MORE: Election Year Debacle: Modi Government's Key Economic Advisor Quits

    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."


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    central banks, director, demonetization, business community, right-wing, Reserve Bank of India, Narendra Modi, India
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