At a news conference, the minister said he would not say anything more than what a press statement issued by his ministry on the RBI row said in the morning
Finance Minister Arun Jaitley Wednesday refused to be drawn into the row over his ministry using a never-used provision to ask RBI for resolution of issues, saying discussions and consultations with the central bank have never been disclosed.
At a news conference, the minister said he would not say anything more than what a press statement issued by his ministry on the RBI row said in the morning. Asked if the government has used the never-used provision under Section 7 of the RBI Act that gives it power to issue directions to the central bank on matters of public interest, he said communications and layers of consultations between the government and the RBI haven't ever been disclosed. Final decisions arrived at are only communicated, he said.
Amid some media reports stating that Reserve Bank of India (RBI) governor Urjit Patel may consider resigning after an alleged rift with Union Finance Minister Arun Jaitley, the Finance Ministry on Wednesday clarified that the government holds "extensive consultations with the RBI from time to time". The Finance Ministry, in a statement released on Wednesday, said that autonomy of the central bank, within the framework of the RBI Act, is an essential and accepted governance requirement. It further asserted that both the government and the central bank, in their functioning, have to be guided by public interest and the requirements of the Indian economy.
"The autonomy for the Central Bank, within the framework of the RBI Act is an essential and accepted governance requirement. Governments in India have nurtured and respected this. Both the Government and the Central Bank have to be guided by public interest and the requirements of the Indian economy," the statement read. "For the purpose, extensive consultations on several issues take place between government and RBI from time to time.
This is equally true of all regulators. The government of India has never made public the subject matter of those consultations. Only final decisions are communicated. The Government, through these consultations, places its assessment on issues and suggests possible solutions. The Government will continue to do so," the statement added. The Centre issued a note amid reports that it had invoked Section 7 of the RBI Act, which allows the central government to issue directions to the central bank governor on matters of public interest.
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