RBI Governor Urjit Patel may resign
November 1, 2018
The Centre seems to be on loggerheads with the Reserve Bank of India (RBI) chairman Urjit Patel with growing reports that the tension may lead Governor Patel to step down.
The tension within is evident from a tweet from former Union Minister P Chidambaram, who 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, Former Union Minister
Earlier, Finance Minister Arun Jaitley had blamed the RBI for causing a loan crisis in the country by not taking the required actions and decisions to tackle the financial situation.
Jaitley also said that the RBI had continued with its bad lending procedures until 2014 despite the 2008 global financial crisis and that had caused an economic crisis in India. On the other hand, Deputy RBI Governor Viral Acharya has blamed the government for undue interference in the RBI's functioning.
Several proposals made by the RBI have been causing disagreement between the central bank and the government. Some of the conflicts have arisen due to proposals such as the setting up of a regulating agency for payment banks, restrictions on banks for giving loans and the handling of the bad loans by the RBI.
The stand taken by the government over the issue is being seen as a threat to the RBI. Some concerned citizens shared their views on social media.
Among them was Shanmuga Pillaiâ€ @shanmugam_18, who said, "For the first time in the history of Independent India, the government has threatened the #RBI to invoke section 7 - under which the @RBI governor comes completely under the control of the Modi Govt."