ANOTHER BLOG FROM THE WALL STREET JOURNAL AUTHORED BY ME. 

The Reserve Bank of India Files

Nupur Acharya/Dow Jones NewsWires

Reserve Bank of India Governor Duvvuri Subbarao at the bank’s new museum in Pune on Tuesday.

“Can we ever forget about remembering?” said Reserve Bank of India governor Duvvuri Subbarao, quoting Nobel laureate Saul Bellowfor a change as he threw open a museum that documents 75 years of central bank history on Tuesday in the western city of Pune.

The archive’s documents, some of which predate the bank’s founding in 1935, are a treasure trove of stories of spats over bank independence, foreign exchange and in some cases, petty change, at least by today’s standards.

In 1957, Benegal Rama Rau, the fourth and longest serving Reserve Bank of India governor resigned from his post accusing the then Finance Minister T. T. Krishnamachari of interference. It’s quite common for Indian prime ministers to reject such moves from loyal stalwarts, which are often symbolic, but Mr. Rau must have been rather surprised by the response he got.

“On a previous occasion I asked you not to resign. I did not think that any need for such a resignation had arisen but since you feel now that it is absolutely impossible for you to continue in office, I don’t know what further advice I can give you. If you so wish you can submit your formal resignation to the finance minister,” a testy-sounding Prime Minister Jawaharlal Nehru, the first leader of independent India, wrote back.

Occasional tension between the finance minister and the RBI governor is almost guaranteed given the respective roles of each office — one a political role to boost growth and manage the nation’s finances, the other a financial role aimed at subduing inflation. These disputes rarely if ever break out in the open, as above.

The most recent chatter of seriously different points of view was in 2007 when Finance Minister P. Chidambaram was said to be opposed to then-Gov. Yaga Venugopal Reddy’s desire to sharply raise interest rates in 2007. In that case too, the finance ministry might have come out ahead. The day he retired in September 2008 Mr. Reddy said he would have preferred a tighter monetary policy during his tenure.

“Nobody can have his or her way in public policy or family life,” he said, when asked about differences with Mr. Chidambaram, now home minister. (Mr. Chidambaram could not immediately be reached for comment.)

Nupur Acharya/Dow Jones NewsWires

Prime Minister Jawaharlal Nehru wrote a letter in 1948 expressing concern about the economy.

Some of the correspondence may have shaped what has now become bank routine. In 1948, Mr. Nehru wrote to the first Indian bank governor, Chintaman Deshmukh, asking for a brief note on the deteriorating economic situation of the country. These days, the prime minister doesn’t have to ask. The central bank does a regular economic assessment just ahead of its quarterly monetary policy statements, and also sends a weekly report to the prime minister’s office.

Reserve Bank employees have occasionally been less than helpful. The archives contain a letter that Indira Gandhi, daughter of then Prime Minister Nehru and later at the helm of the nation herself, wrote in 1961 to the bank governor requesting foreign exchange of 600 pounds (about 8,000 rupees in those days) to pay for her son Rajiv Gandhi to attend Cambridge University, where he met the young Italian woman who became his wife, Sonia Gandhi, now the chief of the ruling Congress Party.

Those were the days were foreign exchange was scarce and there were strict limits on the amount Indians could take out. Today reserves bulge close to $300 billion and the bank now allows Indians to take out up to $200,000 of foreign exchange a year.

In response, someone, presumably a central bank clerk, shelved the request after jotting on it, “No action on our part looks necessary. May be filed.”

The archives were compiled in 1981 and total 23,000 files and 18,000 registers, which are still in the process of being microfilmed, Ashok Kapoor, the bank’s chief archivist, told India Real Time.

Post-script: Prime Minister Manmohan Singh, himself a bank governor from 1982-1985, was the subject of a board meeting to settle his pay the year of his appointment. It was suggested his salary be fixed at 4,500 rupees per month with a total additional allowance of 1,575 rupees. If he wanted to use his official car for a personal purpose, he was to pay the bank 100 rupees per month if the car was below 16 horsepower and 150 rupees if it was above. We hope both Mr. Singh and Mr. Subbarao aren’t being nickel-and-dimed quite as much these days.