Viral Acharya warns of market wrath, bats for more independence for RBI

Dy Governor says central bank must have more powers to supervise PSBs, keep its balance sheet strong and have adequate regulatory scope

Making a strong case for granting more independence to the Reserve Bank of India (RBI), Deputy Governor Viral Acharya on Friday said the central bank must have more powers to supervise public sector banks and keep its balance sheet strong, and have adequate regulatory scope. This independence, he said, was necessary to secure greater financial and macroeconomic stability.

Delivering a hard-hitting speech in Mumbai, Acharya said the governments that did not respect their central bank's independence would sooner or later incur the wrath of financial markets, ignite economic fire, and come to rue the day they undermined the regulatory institution.