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Last updated: 11 Dec, 2018  

urjit-patel-THMB.jpg Urjit Patel quits as RBI Governor

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SME Times News Bureau | 11 Dec, 2018

Reserve Bank of India (RBI) Governor Urjit Patel on Monday resigned from his post with immediate effect, citing "personal reasons".

Patel's resignation comes in the backdrop of the ongoing tiff between the government and the central bank over the liquidity and credit crunch in the economy that provoked an extraordinary meeting of the RBI board on November 19.

"On account of personal reasons, I have decided to step down from my current position effective immediately," Patel said in a brief statement released by the RBI.

Patel had taken charge as Governor on September 4, 2016, for a three-year term, following Raghuram Rajan's decision not to seek a second term which had almost become the norm with earlier Governors.

Reacting to the decision, Prime Minister Modi said Patel steered the banking system out of chaos and brought financial stability.

"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," he tweeted.

Finance Minister Arun Jaitley also appreciated his services to the nation and said it was a pleasure working with him.

Meanwhile, the Congress said the "tyrannical Modi regime" had unleashed a de facto financial emergency in the nation and that the integrity of another institution had been "denigrated".

Congress spokesperson Randeep Singh Surjewala said creating economic anarchy and compromising India's monetary policies through stifling the Reserve Bank of India's (RBI) independence was the DNA of the Bharatiya Janata Party.

The All India Bank Employees' Association (AIBEA) which had earlier demanded RBI Governor Urjit Patel's resignation, termed it a "dangerous trend".

"The resignation of RBI Governor Urjit Patel is quite shocking and disturbing. The reasons for his resignation are obvious and signals a dangerous trend that institutions like RBI are no longer independent," AIBEA General Secretary C.H. Venkatachalam said.

Venkatachalam said at a time when there is a need for a stronger and independent RBI, this vital institution is being intimidated by the central government.

Expressing sadness over RBI Governor Urjit Patel's resignation, former Prime Minister Manmohan Singh said Patel's sudden decision to demit office is a severe blow to the Indian economy.

In a statement, Singh described Patel as an "economist of high repute and also someone who cared deeply about India's financial institutions and economic policy" and wished him success for future endeavours.

"Dr Patel's sudden resignation, at a time when the Indian economy is faced with many headwinds is very unfortunate and is a severe blow to the nation's economy," the statement quoted him as saying.

Describing Reserve Bank of India (RBI) Governor Urjit Patel's resignation as "unprecedented", West Bengal Chief Minister Mamata Banerjee on Monday said the credibility of all institutions is being "destroyed".

She expressed her concern over Patel's quitting and said this was a "financial and economic emergency".

"This has never happened before. This is unprecedented. We are deeply concerned. The RBI is the custodian of public money. The credibility of all institutions is being destroyed. This is a financial and economic emergency," Banerjee tweeted.

Reacting after RBI Governor Urjit Patel quit citing personal reasons, state Congress chief Ashok Chavan said: "It is a clear indicator of the government's constant interference in RBI" and "efforts to reduce the RBI's autonomy".

"The RBI is one of the pillars of India's financial stability with a large role to play in steering the national economy. It has always remained free from political interference. Any attempts to reduce its independence are unconstitutional and should be condemned," he said.

However, downplaying Reserve Bank of India (RBI) Governor's resignation, Niti Aayog vice-chairman Rajiv Kumar on Tuesday said the central bank is a professional institution and is not dependent on one individual.

"RBI is such a professional institution, a long standing institution that the business will continue. It's not as if it is dependent on any one particular individual," Kumar said on the sidelines of 15th Global Inclusive Finance India summit.

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