RBI Governor Urjit Patel resigns

11 December, 2018, 01:43 | Author: Kevin Carter
  • Credit Government of India  Wikimedia Commons

"On account of personal reasons, I have chose to step down from my current position effective immediately", Patel said in the statement which was posted on the bank's website.

"There have been apprehensions expressed earlier by the Deputy Governor of the RBI about the government's intent to raid the capital reserves of the RBI for fiscal purposes".

The government is believed to be unhappy with the RBI over a number of issues including interest rates, how to deploy reserves and how to respond to India's sliding rupee.

It is understood the government is pressuring the bank to enact policies to help spur growth ahead of next year's elections, when Modi will run for a second term. "Under his leadership, the RBI brought financial stability", Modi tweeted.

The RBI and the government have been involved in a tussle for the last many weeks.

"This is something all Indians should be concerned about", Raghuram Rajan, Patel's predecessor as RBI governor, was quoted as saying by Reuters on Monday.

On the matter of relaxing the PCA norms for banks with bad loans, it decided that the issue will be examined by the RBI's Board for Financial Supervision. He steered the banking system from chaos to order and ensured discipline.

His reactions came moments after Patel resigned from his post over reported differences with the central government, which has been accused of diluting the independence of the federal government. Though Rajan never gave any explanation for his departure, he called the resignation of his successor Urjit Patel as the "ultimate weapon" to show the "dissent" against the government. Patel's resignation statement became public after the stock market had closed on Monday.

Indian Prime Minister Narendra Modi
Indian Prime Minister Narendra Modi Credit Пресс-служба Президента Российской Федерации

The appointment would be made by the central government on the recommendation of the FSRASC. On Twitter, Modi praised Patel as a "thorough professional with impeccable integrity".

Another former RBI Governor, C. Rangarajan, anxious about the fallout of Patel's quitting on the market.

In many ways, the resignation was not entirely unexpected, but most observers had expected that the two institutions have smoked the peace pipe after the marathon 10-hour board meeting on November 19.

Citing "personal reasons", the governor stated his intention to step down from the post with immediate effect. "Demonetisation was a massive, draconian, monetary shock: In one fell swoop, 86 per cent of the currency in circulation was withdrawn", he said in the book.

"The government is taking measures that are unsafe for our country". Many governments in the past have chosen an IAS officer to lead the RBI in such situations.

"I am very-very proud that people in all walks of life and all institutions are standing up".

There have been pressure on the RBI for relaxing MSME lending guidelines and gain access to surplus reserves of the central bank which can be employed towards public expenditure. His meeting with the PM was held in the background of strained ties between the RBI and the government over a wide range of issues pertaining to regulation and governance. "Not only it must not be done, it must not be seen to be done either".

More news: CFO of China tech giant Huawei Technologies arrested in Vancouver

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