Urjit Patel resigns as RBI Governor citing personal reasons

Patel, 55, who took over as the 24th Governor of the central bank on September 5, 2016, had the shortest tenure since 1992.

Reserve Bank Governor Urjit Patel, who faced the possibility of an unprecedented action from the government over differences on a variety of issues resigned on Monday from his job citing personal reasons.

Patel, 55, who took over as the 24th Governor of the central bank on September 5, 2016, had the shortest tenure since 1992.

He was hand-picked by the Bharatiya Janata Party-led government after his predecessor Raghuram Rajan was denied a second-term.

"On account of personal reasons, I have decided to step down from my current position effective immediately," Patel said in a brief statement.

His resignation was being speculated right from the time the government cited a never-before-used provision of the RBI Act to get him to consider its views on relaxing lending norms for segments such as small and medium enterprises, appropriate size of reserves the central bank must maintain and easing norms for weak banks.

In his statement, Patel thanked his colleagues at the RBI but made no mention of the government or the finance ministry.

"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," he said.

Patel had more than eight months of the first three-year tenure left and was eligible for a second term as was given to several of his predecessors barring Rajan.

Prior to taking over on September 6, 2016, he was a deputy governor overseeing the monetary policy department at the RBI under Rajan and was known as his 'inflation-warrior'.

Patel, who has worked with the International Monetary Fund, Boston Consulting Group and Reliance Industries, among other organisations, took over after Rajan completed his three-year term on September 4.

Patel is among the few with a corporate background to become RBI Governor, the top post at the Mint Street that has been previously held by mostly career bureaucrats and economists.

Patel is a thorough professional with impeccable integrity, Prime Minister Narendra Modi said after the RBI Governor quit, adding, under his leadership, the RBI brought financial stability.

Finance Minister Arun Jaitley said the government acknowledges with deep sense of appreciation the service rendered by Urjit Patel, adding it was ‘a pleasure for me to deal with Patel and benefit from his scholarship.’

Patel was the eighth deputy governor at RBI to be made Governor, the last being Y V Reddy.

Besides, at least five former Governors had served at International Monetary Fund before becoming RBI chief, while a few others went on to work at IMF after leaving the central bank.

However, some deputy governors served as Governors only for interim periods.

Photograph: Danish Siddiqui/Reuters