Philosopher John Anderson once suggested that for a public institution, instead of asking “what end or purpose does it serve?”, we should ask, “of what conflicts is it the scene?”
Due to its expansive role, the Reserve Bank of India (RBI) is a site of many conflicts.
A conflict that has recently come to the fore is about the RBI’s surplus income. The main source of this income is the sovereign power to issue currency. The RBI purchases securities with currency, and after accounting for the cost of producing and distributing currency, this generates a huge surplus. Before giving dividend to the government, the RBI sets aside money for operational expenditure and for reserves to cover losses in the future.