Mumbai — 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. “To secure greater financial and macroeconomic stability, these efforts need to be extended to effective independence for the Reserve Bank in its regulatory and supervisory powers over public-sector banks, its balance sheet and its regulatory scope,” Acharya said in the speech that was inspired by governor Urjit Patel’s encouragemen...
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