If an institutional structure is not in place, there is a chance that policy coordination would depend entirely upon the personal equations among policymakers and the risk of it breaking down subsequently with changes in the persons at top can not be ruled out.
Indian situation: a review The evolving relationship between the Government and the RBI can be broadly divided into four distinct phases. The legislation to set up the RBI was first introduced in January 1927. The enactment, however, was made after seven years in March 1934. The RBI was set up as a privately owned and managed entity.