Article
Suyash Rai, Anirudh Burman
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Source: Getty
In The Media
Central Banks Like RBI Tend to ‘Build an Empire’, Sometimes at the Cost of Public Interest
Due to its expansive role, the Reserve Bank of India (RBI) is a site of many conflicts.
By Suyash Rai
Published on Aug 28, 2019
Source: Print
Philosopher John Anderson once suggested that for a public institution, instead of asking “what end or purpose does it serve?”, we should ask, “of what conflicts is it the scene?”
Due to its expansive role, the Reserve Bank of India (RBI) is a site of many conflicts.
A conflict that has recently come to the fore is about the RBI’s surplus income. The main source of this income is the sovereign power to issue currency. The RBI purchases securities with currency, and after accounting for the cost of producing and distributing currency, this generates a huge surplus. Before giving dividend to the government, the RBI sets aside money for operational expenditure and for reserves to cover losses in the future.
About the Author
Suyash Rai
Former Fellow, Carnegie India
Suyash Rai was a fellow at Carnegie India. His research focuses on the political economy of economic reforms, and the performance of public institutions in India.
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