Amid friction with Centre, RBI Governor Urjit Patel steps down – the story so far

In a pithy letter, put on RBI's website, he wrote: “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.

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.”

At his last presser as RBI Governor on Wednesday, Patel eschewed all questions about friction with the  Centre, including the invocation of the never-before-used Section 7 or the proposed economic capital framework for the central bank.

RBI Governor Urjit Patel on  Tuesday committed to a parliamentary committee to give in writing his views on some of the controversial issues, which may include the government citing never-used powers to get the central bank on the discussion table, said sources.

Patel, who appeared before the 31-member Parliamentary Standing Committee on Finance, said the economy would get a boost from oil prices cooling off from four-year highs and said fundamentals were "robust", they said.

The RBI Governor also told the Members of Parliament that credit growth was 15 per cent and the impact of November 2016 demonetization has a transient impact on the economy.Patel was earlier scheduled to appear before the panel on November 12.

The RBI Governor appeared before the panel days after the RBI's face-off with the finance ministry over issues ranging from the appropriate size of reserves to be maintained by the central bank to easing of lending norms for small and medium enterprises.

Dr Urjit Patel is an economist of a very high calibre with a deep&insightful understanding of macro-economic issues. He steered the banking system from chaos to order. He leaves behind a great legacy. We'll miss him immensely

FM Jaitley tweeted: “I wish Dr. Patel all the very best and many more years of public service. 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.”

RBI board member S Gurumurthysaid: "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."

"Saddened, not surprised, by Dr Urjit Patel's resignation. No self respecting scholar or academic can work in this government"

Subramanian Swamy on Urjit Patel's resignation: His resignation will be bad for our economy, RBI & govt. He should at least stay till July, until the next govt comes to power. PM should call him & find out the reason&dissuade him from leaving in larger public interest.

Former RBI Governor Raghuram Rajan says "all Indians should be concerned about Governor Patel's resignation"

Rahul Gandhi: In the middle of the meeting(of opposition leaders),we were told that RBI Guv has resigned because he could no longer work with govt. There was consensus in the room that we've to stop BJP's assault on our institutions- CBI, RBI, EC & on the constitution."

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. "Quite clearly the resignation of Urjit Patel shows that nothing has changed," Yashwant Sinha, a former finance minister and member of the ruling Bharatiya Janata Party, told CNBC-TV18.

"The resignation is a clear sign of the government trying to interfere with the working of the RBI," he added.

Former Finance Minister P Chidambaram on Monday said he was saddened but not surprised by the resignation of Urjit Patel as RBI Governor and claimed no self respecting scholar or academic can work in the NDA Government.

In a series of tweets, the senior Congress leader said the last meeting of the Reserve Bank of India Board held on November 19 was the "day of reckoning" and Patel should have resigned on that day. "Dr Patel may have thought that government will re-trace its steps. I knew it would not. Good he quit before another humiliating meeting. "Saddened, not surprised, by Dr Urjit Patel's resignation. No self respecting scholar or academic can work in this government," he said.

Terming RBI Governor's resignation a blot on India’s monetary and banking system, Ahmed Patel reacted: ‘BJP government has unleashed a defacto financial emergency. The country’s reputation and credibility are now at stake.’

It is with great sadness that I received the news of the resignation of the Governor of the Reserve Bank of India, Dr. Urjit Patel. I have known Dr.Patel to be an economist of high repute and also someone who cared deeply about India’s financial institutions and economic policy.

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.

There have been apprehensions expressed earlier by the Deputy Governor of the RBI about the government’s intent to raid the capital reserves of the RBI for fiscal purposes. I hope the resignation of the Governor is not a sign that this may soon become a reality.

Osbourne Smith - First Governor of RBI who from 1 April 1935 to 30 June 1937

Benegal Rama Rau - Governor of RBI from 1 July 1949 to 14 January 1957.

S Jagannathan - Governor of RBI from 6 June1970 to 19 May 1975.

KR Puri - 20 August 1975 to 02 May 1977

RN Malhotra - 4 February 1985 to 22 December 1990.