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RBI, govt should address root causes of standoff: Y V Reddy

Press Trust of India  |  Pune 

To take advantage of India's growing clout in the global space, the government and the central should address the root causes of recent "standoff" between them, former RBI Y V said Friday.

Tensions between the government and the Reserve of (RBI) in the very recent past have been aired in public culminating in the resignation of Urjit Patel, he said at lecture here.

R R Kale founded the renowned and Economics in 1930.

The stand-off between the government and the RBI was witnessed on various issues including sharing of the central bank's surplus, PCA framework and MSME lending.

In October 2018, said, it was transpired that the government had sought the opinions of the RBI under Section 7 of the RBI Act in order to give directions to the in public interest.

"This is unprecedented and virtually meant that the channels of normal communication for reaching agreed position between Government and Governor RBI had broken down.

"The Board of RBI appeared to have differences with Governor on the same issues," said, adding these differences came into public domain after a speech by a

Reddy further said that has to very closely watch the global developments and chart the future of its central banking, more than ever before in history for several reasons.

Future, he said will be more globally integrated and will be increasingly important to the

Also, the country has more opportunities than ever before in the area of financial sector for our dominance with our strengths in technology and skilled manpower.

"To take advantage of it, in partnership with should address the root causes of the recent standoff between them," said Reddy, a bureaucrat who became the RBI Governor in September 2003. He held the RBI office for five years.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, February 08 2019. 21:13 IST