The year was 2010.
An announcement by the Reserve Bank of India (RBI) about a reshuffle in deputy governor portfolios caught the media’s attention. That wasn’t a routine reshuffle. The exercise was primarily meant to target KC Chakrabarty, one of the deputy governors. In one go, Chakrabarty was stripped of all the key portfolios he had handled until then, including the human resource development department, department of administrative and personnel management, urban banks department and rural planning and credit department.
Chakrabarty’s portfolios were given to Subir Gokarn, another deputy governor, who was in charge of monetary policy and research. At the end of that day, Chakrabarty was left with only a handful of rather unimportant portfolios, such as the Rajbhasha department and information technology. He is perhaps the only top central banker in RBI’s history to have his portfolios stripped off at the peak of career.
The RBI deputy governor was paying the price for his outspokenness on controversial issues that were beyond his purview. About a week earlier, reports had appeared in the news media quoting an unnamed RBI official as saying the central bank’s response to inflation was inadequate and policy rates should have been hiked to control inflation. The unnamed official, everyone knew, was Chakrabarty.