Central bank chief vows autonomy

India’s new central bank chief has pledged to uphold the independence of the institution after his predecessor suddenly quit following a row over alleged government interference.

But Shaktikanta Das, seen as an ally of Prime Minister Narendra Modi, told his first media conference as governor that the Reserve Bank of India (RBI) would regularly hold consultations with the government.

“I will uphold the autonomy, integrity and credibility of the Reserve Bank of India as an institution,” Das told reporters in Mumbai on Wednesday.

He added that the government was not just a stakeholder but runs the economy, so there had to be “free, fair, objective and very frank discussions” between it and the RBI. “I would like to believe that all issues, however contentious, can be resolved through discussions.”

Das was appointed the bank’s boss on Tuesday, a day after Urjit Patel resigned following months of tensions with Modi’s administration over attempts to influence policy.

Patel cited “personal reasons” for his decision, but experts and media reports have said he was annoyed by New Delhi’s repeated efforts to impose its influence.

Das is a former senior finance ministry official and a key figure in Modi’s controversial “demonetisation” scheme of November 2016, which scrapped 86% of banknotes overnight.

He is close to Modi and finance minister Arun Jaitley, leading some analysts to say his appointment means the Bharatiya Janata Party-led government will hold greater sway over RBI decision-making.

Other experts say he will be effective at building a bridge between the two feuding institutions, which could help boost Asia’s third-largest economy.

Indian business dailies reported in October and November that the government had invoked never-before-used powers to send at least three letters to Patel seeking to direct policy.