The Reserve Bank is just an extension of the government.

Former Governor of the Reserve Bank of India (RBI), from 5 September 2008 to 4 September 2013, Duvvuri Subbarao, wrote that "the RBI, in exercise of its regulatory power, permitted banks to defer repayments on term loans till the end of August 2020. It was not a mandate, it was just regulatory forbearance. The RBI, in fact, left the final decision to banks." However, the interest on the loan will continue to accumulate so that at the end of the moratorium period the borrower will have to pay a larger amount. Vivek Kaul gives an example of one who has borrowed Rs 3 million at 8.4% to be repaid over 15 years. After the period of moratorium the borrower will have to pay 196 monthly instalments, rather than the original 180. "A borrower approached the Supreme Court praying that the court should order RBI to ask banks to waive the interest during the moratorium period as they had no income during the lockdown period." That seems entirely logical as the RBI is an extension of the government under Section 7 of the Constitution and it was the government which imposed the draconian lockdown on the nation. The RBI was forced to transfer Rs 1.76 trillion from its reserves to the government in August last year even though the then governor Urjit Patel resigned in protest. The RBI maybe responsible for regulating currency in circulation by printing banknotes, but the RBI board did not object when Prime Minister Narendra Modi scrapped 86% of currency in November 2016, wrote Tamal Bandopadhyay. The economy had not recovered from the disaster of demonetization before the coronavirus hit. "Banks are commercial institutions and bankers are expected to make decisions on commercial considerations." Are they? "Finance Minister Nirmala Sitharaman on Tuesday asked state-run banks to help businesses with loan requirements," "to enable small businesses to pay for salaries, rent and restocking". "At Rs 2.1 trillion, the estimated waiver amount is far too large for banks to absorb in their profits. They will be forced to pass on most, if not all, of the burden to savers." In fact, the RBI is actively involved in financial repression of savers through the Statutory Liquidity Ratio (SLR) which compels banks to buy government bonds, thereby increasing price and bringing down yields, and by maintaining a negative real interest rate which reduces value of wealth. As governor, Subbarao kept interest rate persistently lower than rates of inflation, which often exceeded double digits. The present governor Shaktikanta Das has reduced interest rate to 4% even though retail inflation was 5.91% in March. The rate of inflation for April is not known as survey of prices could not be carried out due to the coronavirus lockdown, but a Reuters poll predicts that inflation in May will be at a six-month low. Both Subbarao and the present incumbent Das are retired Indian Administrative Service (IAS) officers and are used to being our lords and masters. Repression comes easy to them. No harm in writing though.