 "Reserve Bank of India | File Photo")
India’s government and the central bank have had disagreements, but the relationship has never looked so irretrievably broken as it does now.
Before the global financial crisis, the finance ministry saw the Reserve Bank of India as an incompetent regulator, one that managed the state-dominated banking industry by keeping it puny and primitive.
In that view, Indian lenders didn't know how to model risks, and a conservative central bank wasn't letting them use credit derivatives to manage them. Pressure from Finance Minister P Chidambaram to open up the banking industry to foreign competition almost led to the resignation of then RBI Governor
