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Both govt & RBI have to be guided by public interest, Finance Ministry says amid reports of row

Finance Minister Arun Jaitley.  Photograph:( Zee News Network )

WION Web Team New Delhi, Delhi, India Oct 31, 2018, 01.25 PM (IST)

The Finance Ministry said Wednesday that both the government and the RBI have to be guided by public interest and the requirements of the economy. 

It added that "autonomy for the Central Bank within framework of RBI Act is essential and accepted governance requirement. Governments have nurtured and respected this." 

There have been several media reports of late of a massive rift opening up between the government and the Reserve Bank of India. 

RBI Deputy Governor Viral Acharya said last week in a public speech that "governments that do not respect central bank's independence will sooner or later incur the wrath of financial markets". Acharya is said to have had the backing of his boss, RBI Governor Urjit Patel. 

The government was reportedly "very upset" by the RBI talking about the rift in public. 

On Wednesday, wionews.com reported that Patel may be considering resigning

In its statement Wednesday, the Finance Ministry added that: "Extensive consultations on several issues take place between government and RBI from time to time. This is equally true of all regulators. Government has never made public the subject matter of those consultations. Only final decisions are communicated." 

Story highlights

There have been several media reports of late of a massive rift opening up between the government and the Reserve Bank of India. On Wednesday, wionews.com reported that RBI Governor Urjit Patel may be considering resigning.