RBI governor's resignation 'severe blow to nation's economy: Manmohan Singh

RBI governor's resignation 'severe blow to nation's economy: Manmohan Singh

He has reportedly cited personal reasons for doing so.

Hand-picked by Prime Minister Narendra Modi, Urjit Patel was handed over the responsibility of the Reserve Bank of India on September 2016 as the 24th Governor of the central bank.

"The support and hard work of RBI staff, officers and management has been proximate driver of Bank's considerable accomplishments in recent years".

Note: The entire text has been reproduced from the Reserve Bank of India website and has not been edited by Firstpost for clarity or style. He acquired an Indian citizenship before he was appointed deputy governor of RBI in January 2013. "Building institutions take a long time and effort but they can be destroyed in a whimper", Singh said in a statement released to the media in New Delhi on Monday hours after Patel quit.

Patel, whose experience includes a mix of stints with multilateral institutions, bureaucracy, central bank, global consultancies and even private companies, has previously served the International Monetary Fund (IMF) in the US, India, Bahamas and Myanmar. On Twitter, Modi praised Patel as a "thorough professional with impeccable integrity".

After weeks of speculation and 'will he?-won't he?', RBI Governor Urjit Patel tendered his resignation from the post on Monday afternoon.

The historic tensions in government-central bank relations were reignited in October when, in a public lecture, RBI Deputy Governor Viral Acharya talked about the independence of the Reserve Bank, arguing that any compromise could be "potentially catastrophic" for the economy.

On the contrary, a BJP member and former Finance Minister Yashwant Sinha in an interview to CNBC-TV18 said, "The resignation is a clear sign of the government trying to interfere with the working of the RBI and nothing has changed".

Analysts said the dispute between the RBI and the government could have been a major factor in Patel's decision to resign. He steered the banking system from chaos to order and ensured discipline.

"Financial stability is not there..."

She proposed that the meeting should continue on Tuesday and leaders of opposition parties should also meet President Ram Nath Kovind over Patel's resignation.

"I thought they could resolve their differences".

The government responded with the Finance Ministry seeking discussions with the central bank under the never-used-before Section 7 of the RBI Act which empowers the government to issue directions to the RBI Governor, who then summoned a meeting of the bank board.

The government is believed to be unhappy with the RBI over a number of issues including interest rates, how to deploy reserves and how to respond to India's sliding rupee. "He should at least stay till July, until the next government comes to power".

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