India's Central Bank Asks Government Not to Undermine Its Role

India’s central bank voiced concerns against the government’s attempts to encroach on its freedom, while seeking more powers to regulate state-run banks as it seeks to clean up the country’s banking system.

In a speech in Mumbai Friday, Viral Acharya, deputy governor in charge of monetary policy, said the central bank has limited powers to discipline errant government-owned banks as it lacks the ability to replace officials, scrap licenses and to push for mergers. Besides, the government is undermining the central bank’s independence by asking for a greater share of surplus at a time when there is a need to make the RBI’s balance sheet stronger.