RBI Governor Dr. Subbarao inaugurates RBI Gallery in Indian Business Museum at IIM Kozhikode
| July 07,2012 02:55 pm IST
Balancing the inflation, the price stability and the financial security of the country is one of the key challenges the Reserve Bank faces said Dr. Duvvuri Subbarao, Governor of Reserve Bank of India, while delivering the leadership series lecture at the Indian Institute of Management Kozhikode on 6th July 2012.
Dr. Subbarao was addressing the students of IIM Kozhikode and he spoke about the significant and the leadership roles that the Reserve Bank, since its inception in 1935, have been playing during the years with its monetary functions and policies and in particular, its constant endeavour to be relevant to the everyday life of every Indian.
Speaking at the inauguration of the PGP batch at the IIM Kozhikode he said, Without sacrificing growth, we will not be able to contain inflation. However, the sacrifice is only for a short period. The economy should be stabilized or else there will not be investments. Low inflation is also important for the mid-term growth and the monetary policy of the RBI is the first line of attempts to save the economy. Dr. Rao added that, it was because of our farsightedness and proactive economic measures that India has been able to recover from the global recession quite fast, but overcoming the inflation and maintaining steady growth at the same time are real challenges for a vast country like India.
Prof. Debashis Chatterjee, Director, IIM Kozhikode presided the function.
The Governor emphasized that the concept of the apex bank is not only to regulate the economy and financial stability of the country but also to reach out to the under privileged. This is a quintessential function of the central bank with objectives such as ensuring price stability, growth and financial security in the market. A post economic reform that the Government has brought through RBI has helped the country boom and has fuelled the Indias aspiration to become a super power. India has moved from being a repressed country to an ever growing state.
The Governor pointed out that the poor sections of the society should derive benefits from the banking sector such as hassle free financial transactions as well as access to credits. The Governor informed that as of today only one out of six of the habitats in India have access to full-fledged banking services, which is quite inadequate and need to be addressed proactively. The RBI will have to consider hundreds of millions of poor people who are directly affected by inflation, along with corporates while setting interest rates, said Dr. Subbarao. Business people are vociferous about interest rate hike. However we have to consider the poor sections of society who are affected by inflation than wealthy people, he explained.
Another criticism against the Bank is that the RBI cannot control inflation as it is caused by external factors. Dr. Rao said that the inflation over the last two years had been imported inflation related to the price of oil. Dr. Rao added that the Bank is sympathetic to the genuine voice of the corporate, but inflation hurts the poor much more. Their voice is not represented in the media. They need to be heard as much as the corporates. Whatever the reason for inflation, we have to stabilize the economy. We are trying to draw a parallel between the growth rate and inflation. The monetary policy of the RBI is the first line of defence to save the economy. he said.
The apex bank is also considering the introduction of polymer notes on a pilot basis in the country. These notes have been introduced in Singapore and Australia. Its longevity is one of its main advantages. An environmental study on the impact of the notes has already been conducted. Also, since it would be in circulation for a longer period, its impact to environment would be negligible. he added.
Dr. Subbarao inaugurated the RBI Gallery in the Indian Business Museum at the Indian Institute of Management Kozhikode. RBI Gallery is one of the significant sections in the Business Museum. The Gallery speaks of the evolution of the reserve bank as well as the origins and history of the financial system in India.
Speaking on the Indian Business Museum, Dr. Subbarao applauded the Institute saying, IIMK is a trailblazer in its endeavour to globalize Indian thought leadership with its efforts to guide and teach aspiring banking, financial professionals the origins of a strongly founded financial system.
Prof. Debashis Chatterjee, Director, IIMK, added the RBI Gallery is indeed a welcome addition to the wealth of information in the Museum and expressed hope that it will inspire the visitors with more insights on this important sector.