India has implemented lot of banking reforms.At the time of taking up further reforms in banking and financial sector it is also necessary to examine whether reforms are necessary in the area of cenral banking in India.In India it is now presumed that in RBI everything is perfect.This presumption is not correct.
The RBI has been using the same montary and credit control measures sometimes excessively too.For example the earlier RBI governor went on hiking rates and containing liquidity till he left RBI at the end of October 2008.He in fact committed some sort of excesses in moneatry tightening and successfully moderated growth in many sectors of the economy..These RBI measures told upon growth and perforamnce of all productive sectors.The present economic down turn and alround pessimism that is prevalent are partly due to the excessive monetary tightening by RBI.
RBI must be innovative.It mustinvent new tools and weapons that can be used without affecting all productive sectors alike.RBI has completed 73 years of its existence.At this stage it is necessary to review the working of RBI and also to examine the efficacy of its moneatry policies.An expert committee must be appointed for this purpose.The Union Government and Union Finance Minister must bestow thoughts on this matter.
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