Urjit Patel Resigns as RBI governor after months of government pressure

He mentioned that “On account of personal reasons,
I have decided to step down from my current position effective immediately

•  RBI Governor Urjit Patel resigned from his post as RBI Governor after a long-draw battle of disagreements with the central government. A months-long tussle over policy with the government that has raised concerns about the bank’s independence as a national election nears.
•  In his short resignation letter, Patel did not write anything critical of the government and said his decision to resign was his personal reasons.
• Experts on the other hand said that this decision was taken because the Modi government for long had been trying to pressure the RBI to ease its lending norms and other policies. Government officials have been pressuring the Reserve Bank of India to allow some bad-debt-laden public sector banks to lend more easily, and pushed for it to hand over some of its surplus reserves to help fund the fiscal deficit.
•  Urjit Patel had a meeting with PM Modi and discussed the various points of friction between the central bank and the Prime Minister’s Office. It was learnt that a middle ground had been agreed. But Patel’s sudden resignation, just three days ahead of a key RBI Board meeting, suggests that things weren’t on the right track.
•  After Urjit Patel’s resignation, Prime Minister Narendra Modi and Union Finance Minister Arun Jaitley wrote public messages in praise of Patel’s work as the central bank governor. Modi said he will be missed.
• Former Prime Minister Manmohan Singh said that the RBI Governor Urjit Patel’s sudden decision to step down is a severe blow to the economy. 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.
•  After the resignation, The Rupee forwards posted their biggest daily slump in more than five years; the Sensex fell by nearly 750 points and closed at less than the 35,000 mark on Monday evening. Experts have cautioned that the markets may be volatile for the next few days until the government takes reassuring decisions to ease investor’s concerns.
  

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Economist Surjit Bhalla also quits from PM Modi’s advisory council

•  Indian economist Surjit Bhalla resigned from Prime Minister Narendra Modi’s economic advisory council effective from December 1.
•  News about Bhalla’s resignation comes a day after the Reserve Bank of India’s governor Urjit Patel quit after a months-long conflicts between RBI and Center over policy with the government.
•  This Advisory Council was framed by Modi late in 2017 to address issues of macroeconomic importance.
  

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