The tussle between RBI and government officials came in public limelight when government sought to transfer the surplus 3.6 lakh crore reserves of central bank. Finance Ministry alleged that existing economic capital framework- which governs the RBI’s capital requirements and terms for transfer of its reserves to the government - is based on a very conservative assessment of risk by the central bank.
In wake of government’s threat to impose Section 7 of RBI Act which states- “The Central Government may from time to time give such directions to the Bank as it may, after consultation with the Governor of ....
