Govt fully respects RBI's autonomy, says Finance Ministry

RBI officials had sent a letter to Urjit Patel that said 'Central bank was dented beyond repair'

The Finance Ministry issued a statement on Saturday, saying that it respects the autonomy and independence of the Reserve Bank of India, while refuting a charge made by RBI officials that the the central bank's image was dented post demonetisation

The statement said, "There has been a report in sections of the Press that some unions have alleged infringement of the autonomy of the Reserve Bank of India. It is categorically stated that the Government fully respects the independence and autonomy of the Reserve Bank of India."

The statement added: "Consultations between the Government and the 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."

In a strongly worded letter addressed to RBI Governor Urjit Patel on Friday, the United Forum of Reserve Bank Officers and Employees had alleged that after the government's demonetisation move, the image of the Central bank was dented beyond repair.

"We request the Governor of the RBI, its highest functionary and protector of its autonomy and prestige, to do the needful urgently to do away with this unwarranted interference from the Finance Ministry and assure the staff accordingly as the staff feels humiliated," the letter had added.

It had also said that the autonomy and image of the RBI was 'dented beyond repair' due to mismanagement and termed the appointment of a senior Finance Ministry official as a 'blatant encroachment' of its exclusive turf of currency management.

The letter came days after concerns about the RBI's functioning being raised by former Prime Minister Manmohan Singh, and former RBI governors Y V Reddy and Bimal Jalan, among others.