Patel's resignation wrong for govt, economy, RBI: Subramanian Swamy

11 December, 2018, 01:43 | Author: Corey Lynch
  • New RBI Governors name announced

It is with great sadness that I received the news of the resignation of the governor of the Reserve Bank of india, Dr Urjit Patel.

He has reportedly cited personal reasons for doing so. He has been in the Reserve Bank of India for about 6 years as Deputy Governor and Governor.

Patel's short statement Monday made no mention of the rift, highlighting only what he called the RBI's "considerable accomplishments in recent years".

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

There was speculation a month ago that Patel might quit over the government pressure, but the rumours eased after the government and central bank reached an uneasy truce ahead of the RBI board meeting last month.

The RBI's central board has 18 members, which includes the Governor and his four deputies as full-time official directors, while the rest have been nominated by the government, including the Economic Affairs and Financial Services Secretaries.

"This is something all Indians should be concerned about", Raghuram Rajan, Patel's predecessor as RBI governor, was quoted as saying by Reuters on Monday.

The former prime minister added that he has known Patel to be an economist of high repute and also someone who cared deeply about India's financial institutions and economic policy. While the exit of Panagariya and Subramanian did not follow any controversy, Patel has left amidst differences of opinion between the RBI and the government.

Jaitley tweeted Monday that the government "acknowledges with deep sense of appreciation" Patel's time at the bank. "Dr. Urjit Patel is a thorough professional with impeccable integrity". He leaves behind a great legacy. "We will miss him immensely", he said.

This also comes in the backdrop of reports of the Centre threatening to use the never-been-used before Section 7 of the RBI Act, under which the Centre can hold a consultation with the RBI Governor and issue directions in matters of public interest. It too warned the government against interfering with the RBI's functioning.

"You see (between) 2008 to 2014, after the global economic crisis, to keep the economy artificially going, banks were told open your doors and lend indiscriminately", Jaitley said at India Leadership Summit organised by US-India Strategic Partnership Forum.

It was agreed in the meeting that RBI's reserves won't be touched, but RBI would be flexible in examining if some banks could be brought out of the prompt corrective action framework (PCA).


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