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RBI Governor Urjit Patel steps down


Mangalore Today News Network

New Delhi, Dec 10, 2018: Reserve Bank of India (RBI) Governor Urjit Patel has stepped down amid rift with the government on various issues, citing personal reasons.

Urjith patel“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,” he said.

In his thanks note the outgoing governor thanked all the people he has worked with, however, skipped the mention of the government. RBI and government have been on warring end off late.

“The support and hard work of RBI staff, officers and management have 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,” he said.

The government and the central bank have been on the warring ends since October, on the issue of independence of RBI.

Meanwhile former RBI governor Raghuram Rajan, has said that Patel’s resignation of Patel is cause of grave concern. "In future, the government should be more careful on their relationship with RBI," he said.

This is the second change of gaurd at the apex bank after Rajan quit in 2016.

Last week, during the monitory policy committee meeting Patel refused comments on the friction with the government, including the invocation of the never-before-used Section 7 or the proposed economic capital framework for the central bank.

Speaking at the customary post-policy presser, wherein the policy rates were left unchanged, Patel parried three questions on these issues.

"I would avoid those questions because we are here discussing the monetary policy resolution," the Governor said.

Another question seeking his views on deputy governor Viral Acharya’s public posturing on RBI autonomy and on the economic capital management framework were also met with similar replies.

"Is this related to the MPC resolution? I don’t think so. We are here to discuss the MPC resolution and the macroeconomy," said Patel, who was facing the press for the first time since the issues came out into the open in October.

Relations between the Mint Road and North Block soured since late October, after the finance ministry mandarins started consultations under the never-before-used Section7 of the RBI Act which empowers the government to direct the central bank to undertake certain policy measures in public interest.

According to central bank sources, the government had sent three letters to the RBI before October 10 with nearly a dozen demands, which were replied to within a week.

Meanwhile Finance Minister Arun Jaitley thanked Patel for his support. "The Government acknowledges with deep sense of appreciation the services rendered by Dr. Urjit Patel to this country both in his capacity as the Governor and the Deputy Governor of The RBI. It was a pleasure for me to deal with him and benefit from his scholarship," Jaitley said in a tweet.


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