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Govt vs RBI: When governors of central bank fought for its autonomy

Acharya's assertions are not surprising considering he himself has been a proponent of keeping central banking separated from any government oversight

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Govt Vs Rbi  |  Nbfc Crisis  |  Viral Acharya

Anup Roy  |  Mumbai 



RBI

Deputy Governor Viral Acharya’s exhortation to protect central banking autonomy should not come as a surprise to anyone considering the long history of a turf-war between the and the government, especially the finance ministry. Tension between the two is as old as the itself. The RBI’s first governor Sir Osborne Smith had differences with the government over exchange rates and interest rates. He resigned before completion of his term. The RBI’s first Indian governor C D Deshmukh has had his difference with the government on nationalisation of the . Deshmukh wanted to keep the independent and beyond the government control. Famously, Sir Benegal Rama Rau, RBI’s second Indian governor resigned in the middle of January 1957 before his second extended term of office expired due to differences with the Finance Minister. Suffice to say, there has been no governor or senior official who has not taken the fight forward. Acharya, and by his extension, Governor Urjit Patel are no exceptions. 

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First Published: Mon, October 29 2018. 05:30 IST

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