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
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
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
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
"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
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.