Urjit Patel resigns as RBI Governor over 'personal reasons', PM Modi reacts

Shaktikanta Das Everything You Need To Know About RBI's New Governor

RSS ideologue and independent director on RBI board S Gurumurthy Monday described the resignation of Urjit Patel as a setback to the convergence that the central bank and the government were reaching on contentious issues.

Congress leader Ahmed Patel also cam down heavily on the government over RBI Governor's resignation and said Urjit Patel has been forced to quit.

In his resignation letter Urjit Patel wrote "On account of personal reasons, I have chose to step down from my current position (RBI Governor) effective immediately".

The surprise resignation of the Reserve Bank of India governor Urjit Patel on Monday should be a matter of concern for all Indians and needs to be investigated, former central bank chief Raghuram Rajan said.

Patel tendered his resignation citing personal reasons. "The resignation is a clear sign of the government trying to interfere with the working of the RBI", he added.

As per the RBI Act, the central bank should have one governor and four deputy governors - two from within the ranks and one commercial banker and another an economist to head the monetary policy department.

Analysts and market watchers said the recent dispute between the RBI and the government could have been a major factor in Patel's decision to resign.

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Finance Minister Arun Jaitley Monday appreciated the service rendered by RBI Governor Urjit Patel saying it was a pleasure to deal with him and has benefitted from his scholarship. He steered the banking system from chaos to order and ensured discipline.

There have been tensions between the RBI and the government over autonomy.

"The RBI and the government had numerous differences but Patel's resignation is shocking", Sujan Hajra, an economist at Anand Rathi securities, said.

"To that extent we must look at this decision and understand why Dr Patel, who was appointed by this government, essentially exercised this particular option", he added. He leaves behind a great legacy.

Taking to Twitter, Prime Minister Narendra Modi stated that under Patel's leadership the RBI brought financial stability and that he 'will be missed immensely'. "The previous meeting was held in such cordial atmosphere that it comes as a shock", he said.

Over the past few months several contentious issues have cropped up between the RBI and the government. "It has been my privilege and honor to serve in the Reserve Bank of India". It is institutions such as the RBI, among many others, that have served as the edifice of our great nation's progress since independence.

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