National Council: In yesterday’s deliberations on the Rupee issue the National Council held the royal monetary authority and the finance ministry accountable for the current economic situation and resolved that appropriate action must be taken against the two institutions.
With the present government’s tenure almost winding up, the council resolved the cabinet secretariat, that would remain even after the government and the parliament dissolves, be responsible in fixing accountability on the two institutions.
“The cabinet secretariat will have to submit a report in the next parliament stating what actions were taken,” the chairman of the house’s economic affairs committee, Rinzin Rinzin, said. “They should be brought to task and necessary administrative actions taken which would either be terminating, replacing or removing the management and replacing them with more competent people.”
If the secretariat does not take any actions, the NC will resolve that actions be taken in turn against the secretariat, Rinzin Rinzin said. “This should be were the blame game must end.”
The chairman of the economic affairs committee said the central bank and the finance ministry were the key institutions responsible for implementing policies that directly or indirectly led to the present state of the economy.
“The financial institutions cannot be blamed although excessive credit was one primary contributor to the rupee shortage,” Rinzin Rinzin said. “Banks are motivated to make investments and as long as there is demand for their product (loans), they would continue lending.”
But the banks behavior should have been properly monitored and regulated by the authorities the chairman said. Actions were taken only after the economy was hit. RMA is the watchdog of the financial institutions.
“The measures which are put in place today like the freeze on construction and transport loans could have been done ages ago when the trend already indicated that it was over heating,” Rinzin Rinzin said.
“There were no well planned actions but reactions to the crisis and as guardians of the country’s economy, you don’t do that.”
The committee’s review on the Rupee issue states that RMA had access to all the data and trends of the economy’s rupee borrowings since a long time ago, but the issue was never accorded due consideration in any of its board meetings. “In most of the minutes of the board meetings, the issue of rupee shortage was discussed as peripheral issue under ‘any other business,’ Rinzin Rinzin said.
NC members said they focused their review on policy matters, governance and institutional causes of the shortage since the task force, the chamber of commerce and local economists had already carried out many studies on the structural weakness of the economy, he said.
The RMA is responsible for monetary policy and the finance ministry the fiscal policy. “There was no proper coordination between the two institutions,” Rinzin Rinzin said.
By Nidup Gyeltshen