RBI autonomy issue: Country's economic system works with cooperation of all parties, says Vijaya Bank MD RS Sankara Narayanan

Bengaluru: Amid reports of RBI and government apparently differing on certain issues, Vijaya Bank MD and CEO R S Sankara Narayanan Monday said the country’s economic system works with active participation and cooperation of all parties concerned. RBI Deputy Governor Viral Acharya’s recently pitched for “effective independence” of the central bank. Asked to comment on instances of apparent differences between government and RBI, Narayanan said,“The economic system in our country works with active participation and cooperation of all parties concerned. [caption id=“attachment_4875601” align=“alignleft” width=“380”] File image of RBI. AFP[/caption] I think, there absolutely is no rift between the government, regulator (RBI) and banks.” “It is hard to believe agencies in an economic system working in conflict with each other,” Narayanan told reporters during the bank’s Q2 results here. Citing the examples of economic turbulence in Argentina and Turkey, Acharya had said governments that do not respect the central bank’s independence would sooner or later incur the wrath of financial markets. In recent months, the RBI and the government have been apparently differing on certain issues, such as those pertaining to payment systems regulator and Prompt Corrective Action (PCA) norms for banks Finance Minister Arun Jaitley has said as an economy evolves, regulation needs to be relaxed or altered keeping in the mind the ground situation. Narayanan said regulators in India were among the best in the world as they are extremely proactive in terms of governance and development of banking. “Moreover, one cannot put bureaucrats in a balance and say who is strong or weak, as they are doing their duties as expected of them,” he said.