While the differences between RBI and Centre seem to be escalating, the International Monetary Fund (IMF) said that they were closely monitoring the reports of the rift between the Centre and the Reserve Bank Of India (RBI). Reports of a feud between the government and the Central Bank surfaced after the Centre invoked Section 7 (1) of RBI Act, 1934, in order to give instructions to the RBI in the matter it considers important for the public. Speaking on the reports, IMF expressed displeasure over Centre interfering in the working fo RBI. IMF further opposed all the moves which were compromising the independence of working of the Central Bank across the world.
Talking about the reports of a rift between Centre and RBI, IMF Director of Communications Gerry Rice said that IMF is monitoring the developments happening in India and will keep doing so. IMF Director said that they support the clear lines of responsibility and accountability. He added that the best practice is that there should be no interference by the government or any industry which may compromise the independence of the Central Bank.
He further asserted that the independence of the Central Bank and financial Supervisor is of utmost importance. As per a report by NDTV, the IMF director said that the organisation have to make the statement in the context of a number countries where the government is said to interfering with the working of the Central bank. The folloiwng remarks were made by the director when he was questioned about the increasing criticism of central banks.
Apart from the reported rift between Government and the RBI in India, US President Donald Trump had reportedly criticised the banks. The following developments surfaced after there were reports claiming that the RBI Governor Urjit Patel received three letters from the Centre on different issues. The letters were reportedly marked under Section 7 of RBI Act.