The Explosive RBI Speech That Has Upset The Government

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RBI Deputy Governor Viral Acharya said that policies should be "rule-based".

New Delhi:

RBI Deputy Governor Viral Acharya said on Friday that undermining a central bank's independence could be "potentially catastrophic", in comments appearing to push back against government pressure ahead of a general election next year. Government officials have recently called for the RBI to relax its lending restrictions on some banks, and Delhi has also been trying to trim the RBI's regulatory powers by setting up a new regulator for the country's payments system.

RBI Deputy Governor Viral Acharya said in a speech on Friday that more needed to be done to ensure effective independence for the central bank in its regulatory and supervisory powers. He reiterated the need for a central bank to fortify its balance sheet against external shocks in the face of demands by governments to transfer surplus reserves to its coffers.

Here is RBI Deputy Governor Viral Acharya's full speech on the importance of Independent Regulatory Institutions:

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