DECEMBER 10, 2018
Mumbai: Reserve Bank of India (RBI) governor Urjit Patel on Monday resigned from the post citing personal reasons. “On account of personal reasons, I have decided to step down from my current position effective immediately. It has been my privilege and honour to serve in the Reserve Bank of India in various capacities over the years,” he said in a brief statement.
Urjit Patel’s resignation is effective immediately. Finance minister Arun Jaitley will soon react to his resignation, Reuters quoted a finance ministry spokesman as saying.
Patel took charge as the RBI governor on 4 September 2016 after Raghuram Rajan resigned from the post on 19 June of that year. Patel’s term as RBI governor was to end in September 2019.
The RBI and government have been fighting for weeks over RBI autonomy as the Centre seeks to reduce curbs on lending and to gain access to RBI reserves. The friction came to light when Patel’s deputy, RBI deputy governor Viral Acharya, warned that compromising with central bank’s independence could be “catastrophic”.
Patel had earlier this month refused to comment on the friction with the government, including the invocation of the Section 7 of the Reserve Bank of India Act, 1934.
The government primarily wants RBI to help NBFCs and MSMEs get some liquidity support, liberalize its prompt corrective action (PCA) framework on and undertake other steps which will help push economic growth.
The RBI board at its 19 November meeting decided to set up a high-powered committee to examine issues related to surplus capital of ₹9.69 trillion with the central bank. It also formed a panel to look at the issues plaguing NBFCs.