RBI Governor Urjit Patel resigns

RBI Governor Urjit Patel resigns

RBI Governor Urjit Patel resigns

Former prime minister Manmohan Singh today said Reserve Bank of India (RBI) Governor Urjit Patel's resignation is "very unfortunate" and a "severe blow" to the country's economy.

While Patel cited "personal reasons" for his exit, former officials who've worked alongside him and current officials involved with the events of the past few months acknowledge that the reasons were different.

In a statement, Mr Patel thanked his staff and officers, calling them the reason for the "bank's considerable accomplishments in recent years".

Note: The entire text has been reproduced from the Reserve Bank of India website and has not been edited by Firstpost for clarity or style.

Acharya had explicitly said he had the backing of Governor Patel for making the speech.

In a brief statement, Patel said he has chose to step down with immediate effect.

It is institutions such as the RBI, among many others, that have served as the edifice of our great nation's progress since independence.

Dr Patel's departure may lead to some anxiety among investors, especially foreign investors.

His three-year term was to end in September 2019 and he was eligible for a second term, like most of his predecessors. "We will miss him immensely", Modi said.

Prime Minister Narendra Modi said that the governor of the Reserve Bank of India, Urjit Patel, who abruptly resigned on Monday had steered the banking system from chaos to stability.

Attacking the Modi government over Patel's resignation, Congress chief Rahul Gandhi said that there is consensus among opposition parties that the assault on institutions such as the RBI must be stopped.

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 way the Reserve Bank is structured is that there is always at a given point in time a pecking order among the deputy governors", Mohan said.

Patel's resignation comes days before the crucial RBI board meeting scheduled to take place on December 14.

RBI's part-time director S Gurumurthy tweeted that he was surprised by Patel's resignation.

"In the middle of the meeting (of opposition leaders), we were told that RBI Guv has resigned because he could no longer work with govt. Economy is suffering, Modi thinks that he's the biggest economist and he doesn't need them, so they are resigning".

There have been tensions between the RBI and the government over autonomy.

From facing flak for allegedly towing the government line on the shock decision to overnight junk 86 per cent of the currency in circulation, he overcame all that as he followed "wisdom of an owl" in clamping down on loan defaults and cleaning up bank balance sheets.

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