Hyderabad, Nov 18, 2025:
The GITAM School of Business (GSB), Hyderabad, on Tuesday hosted former Reserve Bank of India (RBI) Governor and noted economist Dr. Duvvuri Subbarao for a distinguished lecture on the evolving landscape of central banking. Delivering two sessions titled “The Macroeconomic Mandate of Central Banks” and “Navigating Dilemmas: The Future of Central Banking,” Dr. Subbarao offered deep insights into the functioning, challenges, and future priorities of modern central banks.
Addressing students and faculty, Dr. Subbarao began by demystifying the role of the RBI, calling the central bank “one of the greatest inventions since the beginning of time.” He explained how central banking influences the daily lives of citizens through its core functions—currency management, monetary policy formulation, exchange rate management, regulation of financial institutions and markets, oversight of payment and settlement systems, and acting as the banker to governments and commercial banks. He also highlighted the RBI’s broader developmental responsibilities, including promoting economic growth and financial inclusion.
Emphasizing that the RBI’s objectives—price stability, growth and employment, and financial stability—are interconnected, he noted that price stability remains the institution’s principal mandate. Defining it as “low and steady inflation,” Dr. Subbarao explained how monetary policy and the repo rate directly shape inflation, consumption, investment, and overall economic momentum.
“Inflation is the biggest tax on the poor,” he remarked, stressing that preserving confidence in the currency is a fundamental responsibility of any central bank. He elaborated on how the RBI manages liquidity through interest rates and open market operations, warning that both hyperinflation and deflation can severely impair economic functioning. Since inflation expectations often become self-fulfilling, central banks must handle them with utmost caution, he noted.
Speaking about the balance between fiscal and monetary authorities, Dr. Subbarao observed that while central banks are primarily responsible for price stability, supply-side shocks require government-led fiscal measures such as subsidies or tax adjustments. He reiterated the importance of central bank independence, especially because elected governments typically operate within short-term political horizons.
Reflecting on his tenure during the 2008 global financial crisis, Dr. Subbarao shared personal experiences on the importance of credibility, communication, and calm leadership during periods of economic stress. He also outlined how the RBI ensures orderly movement of the rupee and preserves financial stability by regulating both banking and non-banking financial entities in an increasingly interconnected financial ecosystem.
The lecture concluded with an engaging interactive session, during which Dr. Subbarao answered students’ questions and encouraged young managers to “stay curious and read widely.”
Earlier, *Dr. Divya Kirti Gupta, Director of GSB Hyderabad, and **Prof. Ranajee, Chair of the PG Program, welcomed and felicitated the distinguished speaker. The event was coordinated by **Dr. Ajay Kumar. Student coordinator *S. Sandilya introduced the guest, while R. S. Meenakshi and G. Ansika delivered the vote of thanks.
