“On account of personal reasons, I have decided to step down from my current position effective immediately,” a release uploaded by the RBI stated.

RBI Governor Urjit Patel resigns citing personal reasonsPTI
news RBI Monday, December 10, 2018 - 17:37

Reserve Bank of India Governor Urjit Patel on Monday stepped down from his post with immediate effect, citing personal reasons. This development in the midst of a government-central bank tussle over autonomy, reserves to be maintained by RBI and liquidity concerns. Patel's tenure was scheduled to end in September 2019.

“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,” a press release from the RBI stated.

Patel’s resignation comes days before the crucial RBI board meeting scheduled to take place on December 14.

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.' 

"Dr 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. 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," PM Modi tweeted. 

Finance Minister Arun Jaitley tweeted that the government acknowledges with a deep sense of appreciation the services rendered by Patel.

"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," Jaitley tweeted. 

Appointed by the NDA government, Urjit Patel had taken over from Raghuram Rajan on 4 September 2016. He previously served as the RBI’s deputy governor. Urjit Patel was the RBI Governor when two major economic policies – demonetisation and GST – were implemented by the government.

Reports of a full-blown tussle between the central bank and the government came out in the open when in a speech, RBI Deputy Governor Viral Acharya made a scathing statement about the independence of the central bank, and argued that “Governments that do not respect central bank independence will sooner or later incur the wrath of financial markets, ignite economic fire, and come to rue the day they undermined an important regulatory institution”.

This tussle had also fuelled rumours of Urjit Patel’s resignation.

This also comes in the backdrop of reports of the Centre threatening to use the never-been-used before Section 7 of the RBI Act, under which the Centre can hold a consultation with the RBI Governor and issue directions in matters of public interest.

Also read: The RBI-Centre conflict: Five things you need to know

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