Government officials have recently urged RBI to relax its lending restrictions on some banks.
The public spat between the government and the central bank became bitter on Tuesday as Finance Minister Arun Jaitley criticized the top banking regulator for failing to prevent credit excesses by banks between 2008-2014.The comments from Mr Jaitley came after Reserve Bank of India (RBI)'s Deputy Governor Viral Acharya on Friday warned that undermining a central bank's independence could be "potentially catastrophic".
This upset the government which felt that the RBI should not have gone public on differences between the monetary and fiscal powers of the country, news agency Reuters had reported earlier, citing sources.