MUMBAI—In a sign of a mounting policy struggle between India’s central bank and the government of Prime Minister Narendra Modi, a top bank official has warned that undermining a central bank’s independence could be “potentially catastrophic”.
The comments by Reserve Bank of India (RBI) Deputy Governor Viral Acharya showed that the central bank is pushing back hard against government pressure to relax its policies and reduce its powers ahead of a general election due by next May, and as Indian financial markets have been dropping in recent weeks.
