Govt didn’t ask for Urjit Patel’s resignation: Jaitley

New Delhi, December 18

Finance Minister Arun Jaitley today said the government did not seek resignation of Urjit Patel as RBI Governor over differences on some issues, and went on to cite how central bank heads were made to resign under Prime Ministers Jawaharlal Nehru and Indira Gandhi and when Yashwant Sinha was finance minister.

Defending his government’s demands from the RBI to address certain issues, including liquidity or fund problem in certain sectors, he said there is no threat to the autonomy of the central bank.

Patel, who was brought in by Prime Minister Narendra Modi-government in 2016 after a second term was denied to outspoken former IMF chief economist Raghuram Rajan, in a surprise move resigned as RBI Governor on December 11.

Many blamed the pressure brought by the government on the central bank to ease lending restrictions and release more of its capital to bolster the economy for Patel’s resignation.

“Sarkar ki unse koi istife ki apeksha nahi thi (The government did not seek Patel’s resignation),” Jaitley said when asked about Patel’s resignation at ‘Agenda Aaj Tak’ programme here.

The government had cited the never-used-before provision of the RBI Act that gives it powers to issue directions to the Governor, to get the central bank to discuss its areas of concerns.

Two Board meetings after that were “cordial” and decisions were taken on three-four issues while there were also some on which no decision was taken, he said, adding the issue of paring of some of RBI’s over Rs 9 lakh crore reserves after deciding on an appropriate size of buffer was decided to be referred to an expert committee.

While the committee was decided to be formed in the RBI Board meeting held on November 19, a consensus on the composition eluded till Patel resigned.

Jaitley said the expert committee would be announced in a few days time. “So if you are saying that raising these issues is an infringement on autonomy, this is wrong,” he said.— PTI