Should finance ministers from Tamil Nadu assume additional charge as RBI governors?
TCA Srinivasa-Raghavan: BUSINESS STANDARD, New Delhi August 18, 2006 The recent confrontation between the finance ministry and the Reserve Bank of India (RBI) — when the former more-or-less forbade some banks from raising interest rates after the latter had signalled that they should — is only one more in a long series of such major and minor confrontations. By a strange coincidence, almost all have involved a finance minister who comes from Tamil Nadu. The first one, by far the ugliest, happened half a century ago in 1956 and it more-or-less settled the RBI’s fate as a subordinate arm of the government. We have two accounts of it — one in Volume 2 of the RBI’s official history and another in B K Nehru’s autobiography. The finance minister was T T Krishnamachari (TTK) who not only thought that he knew everything but also that no one else knew anything. The governor was Sir Benegal Rama Rau, an ICS officer of impeccable credentials. From the very start TTK treated Rama Rau shabbily, and
