Government Says It "Consults RBI From Time To Time", Accepts Its Autonomy

Amid reports that that Reserve Bank of India (RBI) Governor Urjit Patel may resign on friction with the Centre, the government on Wednesday made it clear that it holds "extensive consultations with the government from time to time" but also accepts its autonomy.

"The autonomy of the central bank ... is an essential and accepted governance requirement," the Finance Ministry said in a statement.

"Governments in India have nurtured and respected this."

The statement from the government came amid reports that it had invoked a never-before-used Section 7 of the RBI Act, which allows it to issue directions to the central bank governor on matters of public interest.

"Both the government and the central bank, in their functioning, have to be guided by public interest and the requirements of the Indian economy. For the purpose, extensive consultations on several issues take place between the government and RBI from time to time, " Finance Ministry statement added.