Finance ministry insists it respects RBI's independence and autonomy

"It is categorically stated that the government fully respects independence and autonomy of the Reserve Bank of India," said the finance ministry.

Finance ministry insists it respects RBI

The day RBI employees wrote a letter alleging that government interferes in affairs of the Central bank, the Finance Ministry refuted these allegations saying that the government fully respects independence and autonomy of the banking regulator.

"Consultations between the government and RBI are undertaken on various matters of public importance wherever such consultation is mandated by law or has evolved as a practice. Consultations mandated by law or as evolved by practice should not be taken as infringement of autonomy of RBI," the ministry said in a statement.


In a letter to RBI Governor Urjit Patel by the United Forum of Reserve Bank Officers and Employees, the employees said that they were feeling "humiliated" by events since demonetisation and alleged that the government has been impinging on the central bank's autonomy by appointing an official for currency coordination.

"It is categorically stated that the government fully respects independence and autonomy of the Reserve Bank of India," said the finance ministry.

The letter came after three former governors -- Manmohan Singh (former prime minister), Bimal Jalan and Y V Reddy -- flagged concerns about the central bank's functioning. Former deputy governors, including Usha Thorat and K C Chakrabarty too, have voiced their worries.

The letter said the RBI staff have carried out its job excellently after the move to ban 87 per cent of the outstanding currency by the government.