Central bank146;s notes

This world is a complicated place, but don8217;t fault the Reserve Bank of India for not trying to hark back to simpler times. Just consider its decisions these past months. The central bank may have been beseeched by economists and common sense to change with the times, but it has stood valiantly firm. Inflation is on the horizon, so it has refused to lower interest rates 8212; never mind the fact that inflation is at the moment commodity-driven. And never mind the pleas of even the Union finance minister. The rupee8217;s appreciation, the RBI reckons, would hurt exports. So it keeps intervening to keep the rupee weak, never mind the argument that appreciation could actually help exporters by lowering the cost of capital.

Every house of immutable wisdom, of resolute orthodoxy, needs a symbol, and this week the RBI indicated it has one: the banknote. Don8217;t do anything that may soil 8212; and so presumably disrespect 8212; the banknotes, it urged. To quote its press relations division: 8220;The Reserve Bank of India today appealed to members of public not to use banknotes for making garlands, decorating pandals and places of worship or for showering on personalities in social events, etc8230; banknotes should be respected as they are a symbol of the Sovereign and public should not misuse them so that the life of banknotes is enhanced.8221; In this regard, the RBI urged people to 8220;contribute their mite8221; to assist in its measures to keep the banknotes in circulation clean.

We shudder. We await a follow-up press release about the wrath that may befall offenders. And we worry. Once cashless transactions dominate the economy, how will the RBI assert its importance? With a commandment that we shall not scratch our credit cards? All of it, perhaps, with the rider that we will not demand lower interest rates.