Post Raghuram Rajan, RBI is no longer a staid and boring Institution which worked behind the scene with hardly any debate over its action or inaction. Suddenly RBI is in the middle of political discourse, they are no longer confined to business pages of National dailies but made to front page headline. And therefore the recent dispute between RBI and Government which led to Governor departure is discussed in office canteens, drawing rooms and dinner tables. But the problem is people are clueless. At first it looked simple, depending on which side of debate are you. On government side, there is excess monies lying with RBI which should be used to the benefit of Country and on opposition side, government is trying to loot RBI money.

And the common man is confused; RBI (Reserve Bank of India) and GOI (Government of India) has one thing in common, India. If there is excess capital lying idle with RBI, which is earning marginal Income to nation, why this is not used. Remember, this is not small change, it ranges between 4.5 lakh Cr. to 7 lakh Cr. as per various estimate. At higher range, its equal to 30-35% of the Union Budget (7 months of GST collection) and at lower end equal to NPAs of all PSUs put together. The discussion on channels or news article is not helping much as there are eminent politicians, economist, Intellectuals on both sides of debate and both seems to have valid points. But finally, we are all family and there is money, what to do. Let’s try to simplify;

If you are from traditional middle class family, did you wonder how our household finance works. Whenever there is crisis in family, and head of family is struggling to arrange finance, from nowhere lady of the house brings out the treasure chest. The so-called pin-money has come to rescue many times in our middle and low-income households (during demonetisation, this was actually a larger booty than known cash). And now substitute head of the family with GOI, lady with RBI and People, rest of the family. RBI is keeping the so-called excess capital for emergency. The problem is to agree on – What is emergency and how much money should be kept of that emergency. GOI and RBI differs on both. The lady thinks that head of the family is lying about emergency and going to squander away this fund and hence can’t be trusted. Head of the family thinks there is an emergency and lady is not coming to rescue of the family. While rest of the family is excited to get that money but wonders who among the family is going to get it (and if it’s not me that lady is right, he is wasting the resource). And the solution is similar to what is done for ages in our families;

Let the parents (RBI & GOI) discuss among themselves, aided by grand parents (MPC, eminent economist and Parliament) to frame a working guidelines to define capital required, end use of excess capital, process to transfer the capital and safeguard against squandering of the emergency funds. And rest of the family (Public) should go back to their work and as in the past, keep RBI policy out of political discourse and canteen debate.

Even real life Bond is anonymous, so be RBI governor.

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