Urjit Patel resigns as RBI Governor, cites personal reasons

Shiv Kumar
Tribune News Service
Mumbai, December 10

Reserve Bank of India Governor Urjit Patel, whose differences with the Narendra Modi government was no secret, today resigned from his post with immediate effect, citing “personal reasons”.

Patel’s three-year term as RBI Governor was to end in September 2019. Buzz about his quitting had been making the  headlines ever since his differences with the Modi government and the board of directors appointed by it came to light.

A speech by Deputy Governor Viral Acharya on the need to ensure the independence of the central bank is said to have worsened ties between the Finance Ministry and the RBI Governor.

Among the major cause for tension was the reported demand by the Centre to pay a higher dividend from the RBI’s reserves. The central bank officials had opposed the move on the grounds that the reserves were required for maintaining the country’s financial stability. The Centre was also said to be upset with the restrictions imposed by the RBI on several public sector banks from lending money.

It is, however, not clear what provoked Patel to resign nearly a month after the central bank’s board meeting. RSS ideologue S Gurumurthy, whose induction into the RBI board had reportedly sparked off a confrontation betwe-en him and other bank officials, tweeted that the last meeting was cordial. He also expressed surprise at Patel’s decision to quit.

The next board meeting of the RBI is scheduled for December 14. It is, however, not clear whether it will take place.

Patel’s resignation, which came after the close of the stock markets, was received with surprise, and brokers at the Bombay Stock Exchange said the markets could fall on Tuesday. This, a day after the Sensex fell more than 710 points as exit polls showed the BJP faring badly in Assembly elections.

‘He steered banking system to order’

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, Prime Minister

‘Deep appreciation of his services’

The government acknowledges with a deep sense of appreciation the services rendered by Dr Urjit Patel to this country both in his capacity as the Governor and Deputy Governor of the RBI. Arun Jaitley, FM

‘All Indians should be concerned’

Dr Patel has made a statement and this is the ultimate statement a regulator or a civil servant can make. We should go into the details as to why there was impasse, which forced this ultimate decision... this is something all Indians should be concerned about because the strength of our institutions is really important. Raghuram Rajan, former Governor, RBI

‘No self-respecting scholar can work’

Saddened, not surprised, by Dr Urjit Patel’s resignation. No self-respecting scholar or academic can work in this government. P Chidambaram, former Finance Minister