A government plays T20, while RBI plays Tests: Dy Guv Viral Acharya continues criticising Centre

Continuing his critique of the Central government, RBI deputy governor Viral Acharya, pressing for independence of the central bank, said that lack of autonomy prevents it from regulating public sector lenders, the Times of India reported.

"A government's decision-making is rendered short, like the duration of a T20 match. In contrast, the RBI plays a Test match... trying to win seach session," he said.

Earlier, pitching for "effective independence", RBI Deputy Governor Viral Acharya Friday said governments that do not respect central bank's independence would sooner or later incur the wrath of financial markets.

Amid instances of apparent differences between the government and the RBI, Acharya emphasised that undermining a central bank's independence is akin to committing a "self goal" for any government.

Wiser politicians will give a central bank necessary autonomy so that they reap electoral benefits of stable macroeconomic conditions which such independence will bring, Acharya said.

Delivering the AD Shroff Memorial Lecture, he said, "What matters is the effective independence with which these powers (vested in the Acts governing the RBI or any central bank) can be exercised in practice."

"Governments that do not respect central bank's independence will sooner or later incur the wrath of financial markets, ignite economic fire and come to rue the day they undermined an important regulatory institution," Acharya said.

Noting that markets have a keen eye on this aspect, he said that if uncertainty grows and confidence in central bank's independence and credibility erodes, "then markets rap bond yields and exchange rate on the knuckles!"