Regulators in India that are not answerable to any appellate authority should involve other stakeholders for better decision-making, the country's finance minister said, according to the Economic Times newspaper.
While the markets regulator, the competition watchdog and the insurance regulator all have a tribunal for appeals, some, including the central bank, do not have one.
"There would only be some exceptions where the decisions are final and, therefore, it becomes obligatory on such a regulator to be consistently in consultation at a very wide level with stakeholders, which includes the government, the market players in the field, so that all relevant inputs come," Finance Minister Arun Jaitley said, without naming the Reserve Bank of India, according to the paper.
The government and the central bank have been at loggerheads in recent months over some strict lending and capital rules ahead of general elections due by May. The government wants the RBI to loosen its regulatory curbs on some banks, ease liquidity and capital norms.
A debt crisis at a major infrastructure lender in September added to a slowing economy, prompting the government to step up pressure on RBI for boosting lending growth. The persistent demands from the government led to a public spat between New Delhi and Mumbai-based RBI since late October.
RBI Governor Urjit Patel, known for his reticent nature, declined to comment on the rift at a monetary policy announcement meeting last week.
However, at the same meeting RBI Deputy Governor Viral Acharya said there was no need for liquidity infusion for non-banking finance companies, going against Jaitley's call for the same after the recent debt crisis.
But Jaitley, who will be addressing a union budget in February, said there was stress in some sectors that need to be addressed, according to the daily.
"Overall liquidity may not be a matter of concern, but within that overall economy there may be sectors which lack liquidity. Therefore, this sectoral stress in those areas will have to be addressed," Jaitley told the Economic Times.