"Consultations between the government and RBI are undertaken on various matters of public importance wherever such consultation is mandated by law or has evolved as a practice. Consultations mandated by law or as evolved by practice should not be taken as infringement of autonomy of RBI," the ministry said in a statement.
The United Forum of Reserve Bank Officers and Employees in a letter to RBI Governor Urjit Patel had said employees were feeling "humiliated" by events since demonetisation and alleged that the government has been impinging on the central bank's autonomy by appointing an official for currency coordination.
"It is categorically stated that the government fully respects independence and autonomy of the Reserve Bank of India," the finance ministry said.
The union raised the issue after at least three former governors -- Manmohan Singh (former prime minister), Bimal Jalan and Y V Reddy -- flagged concerns about the central bank's functioning. Former deputy governors, including Usha Thorat and K C Chakrabarty too have voiced their worries.
The letter said the RBI staff has carried out its job excellently after the move to ban 87 per cent of the outstanding currency by the government.