RBI Governor Urjit Patel resigns

In a major development, the Reserve Bank of India (RBI) Governor Urjit Patel has resigned from his post citing ‘personal reasons’. It is important to note that there have been reports of conflict between the PM Modi led NDA government and the central bank.

Urjit Patel was appointed governor of RBI in 2016 and had about one more year left in his term. According to sources, his deputy Viral Acharya is also likely to step down in the days to come.

"All Indians should be concerned about Governor Patel's resignation," Former RBI Governor Raghuram Rajan was quoted as saying by Reuters.

“Saddened, not surprised, by Dr Urjit Patel's resignation. No self respecting scholar or academic can work in this government,” said Congress leader and former Finance Minister P. Chidambaram in a series of tweets.

The differences between the government and the RBI are said to be related to the important issues of liquidity, credit flow and the controls governing weak banks.

In his statement published on the RBI web site Urjit Patel cited personal reasons for quitting and appreciated the hard work and support of the RBI staff:

"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. The support and hard work of RBI staff, officers and management has been the proximate driver of the Bank’s considerable accomplishments in recent years. I take this opportunity to express gratitude to my colleagues and Directors of the RBI Central Board, and wish them all the best for the future”

Not long after RBI governor announced his decision to step down, #UrjitPatel became the top trending hashtag on Twitter. Sharply reacting to the news, several users lambasted Modi government for public face-off with the Governor over autonomy of the RBI. Here’s a collection of some reactions:

Meanwhile, the RBI has denied speculation about deputy governor Viral Acharya also quitting his job, terming them as incorrect and baseless rumours.

"Reports of deputy governor Acharya also having quit are baseless and incorrect," an RBI spokesperson told PTI.

Within minutes of Governor Urjit Patel announcing his decision to quit, there have been reports of Acharya also following suit.

Acharya had made the October 26 speech on the need to preserve the autonomy of RBI, which got the soured central bank-government relationship out into the public domain.

In the over 90-minute long speech, Acharya, who is incharge of the monetary policy department, warned of the wrath of the markets if the autonomy of a central bank is compromised. Acharya had explicitly said he had the backing of Governor Patel for making the speech.