Centre looks to meddle in RBI policy; Draft Indian Financial Code to dilute RBI chief’s power

In a move that may dilute powers of RBI chief, the government proposed taking away his authority to veto the interest rate decision of the central bank’s monetary policy committee.

The revised draft of IndianFINANCIALCode (IFC), released by the Finance Ministry, has also proposed that the all-powerful committee would have four representatives of the government and only three from the central bank, including the ‘RBI Chairperson’.

The draft talks of ‘RBI Chairperson’ and not ‘RBI Governor’. RBI is headed by a Governor, at present.