RBI and CAG audit

The argument to bring RBI under the fold of CAG audit does not sound logical and is uncalled for unless the intention is to take away even the remaining independence of RBI. RBI does not raise resources from any source as its incomes are basically by way of interest from Govt on the securities.The incomes of RBI are from assets owned on behalf of the Govt and from the Forex reserves maintained and invested. Unlike other Statutory Regulatory agencies RBI has no way of raising resources from the institutions or public except the CRR from banks which are essential as a monetary tool to influence money supply and discipline banks.The RBI earns interest on lendings to Govt and banks which are transparent and as per well laid down procedures and practices. RBI has never been a commercial organisation and it is not driven by profit considerations. Its functions also do not envisage to frame policies to make money for itself and by its staff in any manner. The only area perhaps there is scope  at all for audit by CAG is on expenditure side which is kept to the barest minimum because of Conservativeness the RBI has been pursuing since its inception.Here also, RBI has well laid down system and procedures and they are all transparent.RBI runs its show with minimum staff and efforts are continuously on to reduce the staff further Expenditure is seen as an allergy and staff have been well trained to be so economical that even genuine needs are often overlooked..Even the pay and perks of staff are not comparable and very favorable when compared with many Central banks of the world and large Corporates in India. The pension payable is not even on par with  the Central govt employees and many are drawing a pittance making it difficult to make both ends meet. Less said the better about the conditions of pensioners because of miserly attitude of RBI towards pensioners.In these circumstances,it is surprising to observe that on what basis the idea of bringing RBI under CAG audit has emerged.RBI is perhaps the only institution which is self disciplined, self audited and having all possible checks and balances on expenditures.Corruption is unknown to RBItes is a well acknowledged truth.

 Dr.T.V.Gopalakrishnan

 (This comment  in a modified form appeared in response to the article Who would audit RBI? in ET dated 6/6/13)