RBI governor Urjit Patel resigns amid rift with Modi govt

New Delhi: The Reserve Bank of India (RBI) Governor Urjit Patel resigned on Monday amid a reported rift with the Narendra Modi-led government.

The resignation of the top official is being perceived as a huge setback to the central government which is accused of undermining the autonoomy of several organisations including the RBI.

In a brief statement, Patel said he has decided to step down with immediate effect. He, however, did not specify the reason for the decision.

Patel was appointed the 24th Governor of the RBI on September, 2016 for a three-year term.

The government and the RBI have been fighting for weeks over how much autonomy the RBI should have as the administration of Prime Minister Narendra Modi seeks to reduce curbs on lending and to gain access to the RBI's surplus reserves.

PM lauds Patel's contribution

Soon after Urjit Patel quit as RBI Governor, Prime Minister Narendra Modi lauded his contribution saying he steered the banking system "from chaos to order" and ensured discipline.

He said Patel is a thorough professional with "impeccable integrity".

The prime minister said Patel leaves behind a great legacy and will be missed immensely.

"Dr Urjit Patel is an economist of a very high calibre with a deep and insightful understanding of macro-economic issues. He steered the banking system from chaos to order and ensured discipline. Under his leadership, the RBI brought financial stability," the PM wrote on Twitter.

"He has been in the Reserve Bank of India for about 6 years as Deputy Governor and Governor. He leaves behind a great legacy. We will miss him immensely," Modi said.

Was a pleasure to deal with him: Jaitley

Finance Minister Arun Jaitley Monday appreciated the service rendered by Patel saying it was a pleasure to deal with him and has benefitted from his scholarship.

"The Government acknowledges with deep sense of appreciation the services rendered by Dr Urjit Patel to this country both in his capacity as the Governor and the Deputy Governor of the RBI. It was a pleasure for me to deal with him and benefit from his scholarship," Jaitley tweeted.

"I wish Dr Patel all the very best and many more years of public service," he said.

Gurumurthy shocked

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.

He termed the Patel's resignation as "shock" and said he will be missed.

"Surprised at the news that RBI governor has resigned," he said in a tweet.

The November 19 board meeting of the RBI was held in "such cordial atmosphere" that the resignation comes as a "shock", Gurumurthy said.

He further stressed that all directors on the board said media had created a wrong perception, while inside it was totally different.

That makes the development even more surprising, the swadeshi ideologue said.

"I enjoyed several hours of personal discussions with him where we found large areas of agreement as well as mutually understandable disagreement. His resignation is indeed setback to the effects of the convergence of views that was taking place. We will miss him," he said in another tweet.