Bond trading disrupted due to RBI staff protest
Bond trading was hit on November 18 as investors and traders stayed away from the market. They were worried by the Reserve Bank of India staff unions calling on their members to take protest leave which could upset payment settlements. Buying and selling activities came down to Rs.9000 crore in a week compared to daily average bonds worth Rs.20000 crore.
Presenting the 2015-16 budget, finance minister Arun Jaitley proposed to establish a public debt management agency (PDMA). He said that PDMA would bring India's external borrowings and domestic debt under one roof. He added that the Indian bond market needs to be made world class so as to promote investment in the country, especially in the infrastructure sector.
RBI Governor Raghuram Rajan said there was no reason for RBI to manage public debt and he would be happy if ythe management goes to government. He said there was full understanding between him and finance minister on setting up the PDMA. A roadmap was being prepared by the government in order to transfer the debt management function from RBI to an independent agency.
RBI employees were planning to go on a one-day mass leave to protest against the government's attempts to intervene in monetary policy. An official said that the mechanism of government's Public Debt Management Agency (PDMA) intervened in the RBI's jurisdiction. He said that in the name of draft financial code and legislative reforms, the government of India was trying to cripple RBI.
On 20 February 2009, RBI staff had staged a similar protest after the government had refused to align the RBI's pensions in line with that of the federal and state governments.
The RBI management termed staffers' plan to take mass casual leave as illegal. However, union leaders said that RBI employees and officers would observe mass casual leave on November 19. The Convener of United Forum of Reserve Bank Officers and Employees, Samir Ghosh said this would express their strong opposition to systematic curtailment of functions, authority and jurisdiction of RBI by the government.
