November 16, 2018 / 3:11 PM / a month ago

Indian government wants committees to oversee central bank, Bloomberg reports

MUMBAI, Nov 16 (Reuters) - India’s government is seeking to form several panels to monitor various functions of the central bank, Bloomberg reported on Friday, citing people with knowledge of the matter, which could escalate tensions between the finance ministry and the bank.

The government of Prime Minister Narendra Modi has proposed that the board of the Reserve Bank of India (RBI) draft regulations that will enable it to set up committees to monitor tasks such as financial stability, monetary policy transmission and foreign exchange management, the report added.

Each panel might consist of two to three members of RBI’s central board, which includes representative of the finance ministry, senior company executives and some economists close to Modi’s ruling nationalist party.

The RBI and India’s finance ministry did not immediately respond to requests for comment.

The board meets on Monday, amid government pressure on the RBI to relax lending curbs and hand over surplus reserves to the government.

New Delhi and the RBI are getting close to ironing out some of their policy differences, two sources previously told Reuters, as they seek to defuse tensions that had threatened to unnerve investors. (Reporting by Sankalp Phartiyal; editing by Krishna N. Das, Larry King)

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