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Indian central bank fights lonely battle for independence and trust

Discord with government focused on elections and businesses puts RBI in corner

The Reserve Bank of India Governor Urjit Patel is under pressure by the Indian government and businesses.    © Reuters

MUMBAI/ NEW DELHI -- A slowly brewing storm over the past few months between the Indian government and the Reserve Bank of India has finally culminated in a public war of words amid rumors the central bank governor Urjit Patel is on his way out. Now with businesses turning clearly to the government's side, RBI is finding itself in a lonely fight.

At the heart of contention are policy issues such as liquidity for nonbank financial companies, capital requirements for weak banks and lending to small and midsize businesses -- areas in which RBI's moves have been at odds with the government's expectations.  

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