RBI Governor Urjit Patel quits

MUMBAI: When all looked well and the dust seemed settled on issues between the Government and RBI, the central bank governor Urjit R Patel chose to announce his resignation on a day when the BJP top brass is going to have a ‘sleepless night’ counting the hours down to the announcement of the much-awaited election results in five states tomorrow.

The big question the market is eager to find an answer to is, “whether this is going to be a double whammy for the government, if the election results tomorrow fail to work in favour of the BJP-government.”

“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 (RBI) 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,” was what the RBI Governor said in his terse statement issued today.

The disquiet between the government and the RBI has come from behind the curtain with the Governor Dr Patel’s speech that called for greater regulatory power for RBI to control the public sector banks like it enjoys on private sector banks. He stressed in his speech delivered in March that “the banking regulatory powers should be ownership neutral.”

The speech that was delivered by the deputy governor Dr Viral Acharya later in October was viewed as the last nail on the equations between the central bank and the government. Dr Acharya was much for forthcoming and the innuendos in the speech were far more hard hitting and touching upon vaster problem areas.

Speculations are galore – right from whether the governor was asked to resign; whether the deputy governor Dr Viral Acharya will also follow the footsteps of his boss; has Urjit Patel already sounded his intention to resign before the MPC meeting last week, etc.

 

 

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