The 24th governor of RBI Urjit Patel today stepped down stating personal reasons for the decision.
Reserve Bank Governor Urjit Patel today stepped down stating personal reasons for the decision. The resignation comes following friction with the government and in the middle of his tenure which would have formally ended in September 2019, making his tenure the shortest since 1992.
He was hand-picked by the BJP-led government after his predecessor Raghuram Rajan was denied a second term.
He said, “It has been my privilege and honour to serve in the Reserve Bank of India in various capacities over the years, support and hard work of RBI staff, officers & management has been a proximate driver of Bank’s considerable accomplishments in recent years. I take this opportunity to express gratitude to my colleagues & Directors of RBI Central Board & wish them all the best for future.”
Patel is among the few with a corporate background to become RBI Governor, the top post at the Mint Street that has been previously held by mostly career bureaucrats and economists.
Recently, the public spat between the government and RBI got wider public attention, the RBI’s central board, at its November 19 meeting, decided to climb down and to set up a panel to study the quantum of capital it requires apart from restructuring loans of up to Rs 25 crore to give a succour to the troubled MSMEs.
Congress reacted sharply on the resignation and stated,” Integrity of another institution stands denigrated by Modi regime.”
Another one bites the dust.
This is the result of our 'chowkidar's' assault on democratic institutions – RBI Governor, Urjit Patel steps down. https://t.co/SFEih1WYZ9
— Congress (@INCIndia) December 10, 2018
Further, Finance Minister Arun Jaitley issued a comment saying government acknowledges with deep sense of appreciation the service rendered by Urjit Patel.
The Government acknowledges with deep sense of appreciation the services rendered by Dr. Urjit Patel to this country both in his capacity as the Governor and the Deputy Governor of The RBI. It was a pleasure for me to deal with him and benefit from his scholarship. (1/2)
— Arun Jaitley (@arunjaitley) December 10, 2018
PM Narendra Modi tweeted appreciating Urjit Patel’s calibre as a leader and lauded his professionalism and integrity.
Dr Urjit Patel is an economist of a very high calibre with a deep and insightful understanding of macro-economic issues. He steered the banking system from chaos to order and ensured discipline. Under his leadership, the RBI brought financial stability.
— Narendra Modi (@narendramodi) December 10, 2018
Surprised at the news that RBI governor has resigned. The previous meeting was held in such cordial atmosphere that it comes as a shock. All directors said media had created a wrong perception while inside it was totally different. That makes it even more surprising
— S Gurumurthy (@sgurumurthy) December 10, 2018
The government also recently invocated the never-before-used Section 7 or the proposed economic capital framework for the central bank with was not met with much enthusiasm from the RBI.
The government, which is staring at falling revenue and a likely fiscal slippage, wants the RBI to part with a large portion of it Rs 9.6 trillion of its cash surplus, which the central bank has been sternly opposing.
(With input from agencies)