Urjit Patel resigns as RBI Governor; cites personal reasons for quitting

RBI Governor Urjit Patel has resigned citing "personal reasons" for stepping down from the position. "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," Patel said in a statement.

He added: "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."

Prime Minister Narendra Modi has said that RBI Governor "leaves behind a great legacy". PM Modi also said Patel "steered the banking system from chaos to order and ensured discipline". Under his leadership, the RBI brought financial stability, said the PM.

Dr. Urjit Patel is a thorough professional with impeccable integrity. He has been in the Reserve Bank of India for about 6 years as Deputy Governor and Governor. He leaves behind a great legacy. We will miss him immensely.

- Narendra Modi (@narendramodi) December 10, 2018

Finance Minister Arun Jaitley posted a tweet on Patel's resignation saying the government acknowledges Patel's services as the governor of the RBI. "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.  I wish Dr. Patel all the very best and many more years of public service," Jatitley tweeted.

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. (1/2)

- Arun Jaitley (@arunjaitley) December 10, 2018

Patel's resignation comes after the central bank's spat with the Finance Ministry over issues related to autonomy and governance of the central bank. In the press conference after last week's monetary policy committee meet, Urjit Patel had refused to comment 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.

Independent Director of the RBI, Satish Marathe, while speaking to India Today TV, said he was both surprised and sad at Patel's resignation. He said he didn't know why Urjit Patel had resigned, and that "things looked settled and were moving smoothly". "Such things are to be taken as concern. The issue of liquidity was addressed... the issue of giving support to SME was addressed… (And) to determine economical capital for the Reserve Bank was resolved," said Marathe.

He added these issues were unanimously discussed and resolved during the previous RBI board meetings. Regarding the invoking of section 7 of the RBI Act, Marathe said: "Section 7 was never invoked". He also said things would be clear only after the RBI board meeting on December 14.

Meanwhile, Subramanian Swamy, in an interaction with India Today TV, reacted saying: "Timing of the resignation is wrong. It's wrong for the economy and also for the government. If he (Patel) says he has resigned on personal ground, the PM should persuade him that he can't leave at this time of crises."

Part-time director of the RBI, S Gurumurthy, said he was surprised at the news that RBI governor has resigned. "The previous meeting was held in such cordial atmosphere that it comes as a shock. All directors said media had created a wrong perception while inside it was totally different. That makes it even more surprising".

I enjoyed several hours of personal discussions with him where we found large areas of agreement as well as mutually understandable disagreement. His resignation is indeed set back to the effects of the convergence of views that was taking place. We will miss him.

- S Gurumurthy (@sgurumurthy) December 10, 2018

The Opposition parties, including the Congress, have launched an all-out attack on the government, calling it an economic anarchy. Senior Congress leader Ahmed Patel also said that the manner in which the RBI governor has been forced to quit is a blot on India's monetary & banking system.

Ahmed Patel on Urjit Patel's resignation as RBI Governor: The manner in which RBI governor has been forced to quit is a blot on India's monetary & banking system. BJP Govt has unleashed a defacto financial emergency. The country's reputation&credibility is now at stake.(File pic) pic.twitter.com/jDGI4UAr9b

- ANI (@ANI) December 10, 2018

"Economic anarchy, compromising India's monetary policies & attempting to stifle RBI's independence by Govt appointed puppets is the DNA of BJP!," said RBI Governor Randeep Singh Surjewala.

Integrity of another institution -RBI, stands denigrated by a tyrannical Modi regime as reflected in RBI Governor's unceremonious exit.

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Economic anarchy, compromising India's monetary policies & attempting to stifle RBI's independence by Govt appointed puppets is the DNA of BJP!

- Randeep Singh Surjewala (@rssurjewala) December 10, 2018