RBI vs govt, again! peace moves go for toss after Finmin Barb, reserve bank gets in another shot.

The fragile peace between the finance ministry and the central bank was ruptured on Friday when economic affairs secretary Subhash Chandra Garg took a pot shot at Reserve Bank of India (RBI) deputy governor Viral Acharya's stern warning last week that governments that make incursion into central banks' autonomous regulatory space would incur "wrath of the markets"

By the evening, RBI deputy governor NS Vishwanathan had come back with his own ripsote, to explain why the regulator's capital adequacy norms must not be diluted.

In a tweet, Garg said: "Rupee trading at less than 73 to a dollar, Brent crude below $73 a barrel, markets up by over 4% during the week and bond yields below 7.8%. Wrath of the markets?"

In response to the government saying CRAR (Capital to Risk Weighted Assets Ratio) norms were too high - higher than Basel norms - Vishwanathan said, "We must guard against any push for dilution of standards in the name of aligning them with international benchmarks because that will be cherry-picking and will result in our banks being strong in a make-believe sense and not in reality."On Wednesday, the finance ministry had said the government has "nurtured and respected" the central bank's autonomy as an essential and accepted...