Mumbai: Reserve Bank of India (RBI) Governor Urjit Patel resigned on Monday with immediate effect, citing “personal reasons”, setting of a major crisis in India’s politico-economic sphere, even as his various predecessors hinted that the move was rooted in the recent controversy involving the government and the central bank.
Patel’s resignation comes in the backdrop of the ongoing tiff between the government and the central bank over the liquidity and credit crunch in the economy that provoked an extraordinary meeting of the RBI board on November 19.
“On account of personal reasons, I have decided to step down from my current position effective immediately,” Patel said in a brief statement released by the RBI.
Patel had taken charge as Governor on September 4, 2016, for a three-year term, following Raghuram Rajan’s decision not to seek a second term which had almost become the norm with earlier Governors.
The historic tensions in government-central bank relations were reignited in October when, in a public lecture, RBI Deputy Governor Viral Acharya talked about the independence of the Reserve Bank, arguing that any compromise could be “potentially catastrophic” for the economy.
The government responded with the Finance Ministry seeking discussions with the central bank under the never-used-before Section 7 of the RBI Act which empowers the government to issue directions to the RBI Governor, who then summoned a meeting of the bank board. (IANS)
