Published: Tue, December 11, 2018
Markets | By Jeffery Armstrong

Deputy governor NS Vishwanathan may be made RBI interim head

Deputy governor NS Vishwanathan may be made RBI interim head

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.

Although Patel cited personal reasons for the resignation but industry watchers say there were undercurrent since the the government cited hereto never-used-before provisions of the law to bring him to negotiating table on issues it felt were of national interest.

Dr. Patel further said that it was of utmost importance to maintain the central bank's reserves as this was essential to maintain the country's AAA rating.

"Support & hard work of RBI staff, officers & management has been proximate driver of Bank's considerable accomplishments in recent years". He steered the banking system from chaos to order.

Patel, 55, who took over as the 24th Governor of the central bank on September 5, 2016, had the shortest tenure since 1992. He leaves behind a great legacy. "We will miss him immensely", he wrote on Twitter.

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Senior Congress leader Ahmed Patel said the Bharatiya Janata Party has "unleashed a defacto financial emergency".

Urjit Patel, the governor of the Reserve Bank of India, has resigned from his post on the central bank's board.

In a brief statement, Patel said he has made a decision to step down with immediate effect. Soon after Patel's resignation, which came following a months-long fractious faceoff with the government, the Nifty and Sensex had plunged around 2 per cent on Monday to register their worst closing levels in four weeks.

"You see (between) 2008 to 2014, after the global economic crisis, to keep the economy artificially going, banks were told open your doors and lend indiscriminately", Jaitley said at India Leadership Summit organised by US-India Strategic Partnership Forum.

Raghuram Rajan and Urjit Patel.

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He said Patel is a thorough professional with "impeccable integrity". The RBI Governor has resigned because he is protecting the institution of the RBI and he is not able to function.

He added that setting monetary policy must also be the exclusive domain of the RBI.

Patel's sudden resignation is expected to roil financial markets on Tuesday. This owing to the series of tussles that the Reserve bank as an institution had with the centre.

While historically there have been differences between the RBI and the nation's governments, the extent of the rift and its public nature are unprecedented.

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