Sharing his take towards the ongoing tussle between government and the RBI, he said that the unhealthy disagreements between both should not escalate further. “Once you have appointed a governor or deputy governor, you should listen to them,” Rajan said, adding that he commends Viral Acharya for warning in support of RBI’s autonomy.
“The rift between the government and RBI can be resolved if both sides respect each other’s intent,” he told CNBC TV18. Further commenting on the government’s attitude towards the issue, Rajan said that there is no free lunch and there is no additional money government can get. “You can't pick and choose which regulation you like, which you don't, former RBI governor said during his interview.
Rajan also stated that the Central bank needs adequate capitalisation for high creditworthiness. “A lot of noise has been inserted in the RBI board's deliberations in the recent past; running over a central bank hasn't been good for any economy,” he added further.
Last week, the Central Information Commission has issued a showcause notice to Reserve Bank of India Governor Urjit Patel for allegedly dishonouring a Supreme Court order regarding the disclosure of a wilful defaulters list. The commission asked Patel why the maximum penalty should not be imposed on him for withholding the list despite a three-year-old court order, news agency PTI reported.
The move comes amid an ongoing row between the top bank and the central government. The commission also asked the Prime Minister’s Office, Finance Ministry and the RBI to make public former RBI Governor Raghuram Rajan’s letter on bad loans.