Urjit Patel may resign as Jaitley’s remarks widen RBI-govt rift: Report
New Delhi, Oct 31: Reserve Bank of India (RBI) governor Urjit Patel may consider stepping down from the post following Finance Minister Arun Jaitley's scathing criticism of the central bank's "lending spree" on Wednesday.
Reports about Urjit Patel stepping down as the RBI governor started floating following Finance Minister Arun Jaitley's scathing criticism of the central bank's "lending spree", reports quoted sources as saying on Wednesday.
"RBI governor may even consider resigning. All options on the table," a CNBC-TV18 report quoted a source familiar with the matter as saying. It quoted another source as saying that there is "irreversible breakdown between RBI governor and the government".
Warning of more "bad news", former finance minister and senior Congress leader P Chidambaram said, "If, as reported, Government has invoked Section 7 of the RBI Act and issued unprecedented 'directions' to the RBI, I am afraid there will be more bad news today," he said.
If, as reported, Government has invoked Section 7 of the RBI Act and issued unprecedented ‘directions’ to the RBI, I am afraid there will be more bad news today— P. Chidambaram (@PChidambaram_IN) October 31, 2018
We did not invoke Section 7 in 1991 or 1997 or 2008 or 2013. What is the need to invoke the provision now? It shows that government is hiding facts about the economy and is desperate— P. Chidambaram (@PChidambaram_IN) October 31, 2018
Jaitley had on Tuesday blamed the RBI for failing to stop a lending spree between 2008-2014 that left banks with huge bad debts, inflaming a row that recently erupted between the government and the central bank.
On Friday, RBI Deputy Governor Viral Acharya warned that undermining a central bank's independence could be "potentially catastrophic", in an indication that it is pushing back hard against government pressure to relax its policies and reduce its powers ahead of a general election due by next May.