The final decision on transferring a part of the excess reserves to the government has to be that of the Reserve Bank alone and any attempt to take away its autonomy could pose a risks to the economy, warns former chief economic advisor Kaushik Basu.


The comments come within two days of former RBI governor Raghuram Rajan cautioning that transfer of the reserves may bring down the rating of the central bank.


"There is scope for transfer of excess reserves of the RBI to the government, but it has to be the RBI's decision...You can't do that by confiscation by the government. If the RBI says no, it understands why it is not saying so," Basu, the C Marks Professor of International Studies at Cornell University, US told PTI Wednesday.


He said decision on such important matters has to be taken in consultation with RBI only. "I think this kind of thing has to be completely with the government talking to the RBI and the final say on this has to be that of RBI. "If you don't do that, and if you try to take away their autonomy, you are taking a huge long-term risk with the economy," Basu, who was also a past chief economist with the World Bank, said. -- PTI