Urjit Patel resigns, updates: Markets brace for uncertain opening on Tuesday as RBI governor quits on even of Assembly election results

Market experts anticipate gloom on Dalal Street tomorrow with election results lined-up

The resignation of RBI governor Urjit Patel has come as a big blow for not just the central bank but also the financial markets. There was already an anticipation of a tumultuous day for the markets owing to the five state Assembly elections results and with Patel’s departure, the Sensex and Nifty could suffer further. Here is what the experts are predicting for the street as of now .

The road ahead for RBI

With the RBI governor resigning nine months short of his scheduled departure, there is a big question mark on who will take over the reins of the central bank. Former deputy governor Rakesh Mohan told CNBC-TV18  that all the four deputy governors should stay and steer the ship in the governor’s absence. He also cautioned the government to proceed with deliberation over the next pick for the post.

No truth to rumours of Viral Acharya resigning, confirm RBi officials

Amid speculations of RBI deputy governor Viral Acharya also resigning, the central bank has refuted the rumours saying that there is no basis to such reports. “Reports of deputy governor Acharya also having quit are baseless and incorrect,” an RBI spokesperson told PTI.

Acharya had made the 26 October speech on the need to preserve the autonomy of RBI, which got the soured central bank-government relationship out into the public domain. In the over 90-minute long speech, Acharya, who is in charge of the monetary policy department, warned of the wrath of the markets if the autonomy of a central bank is compromised. Acharya had explicitly said he had the backing of Governor Patel for making the speech.

P Chidambaram says no self-respecting scholar can work in Modi govt, Patel should have resigned on 19 Nov itself

Chidambaram tweeted that he was saddened but not surprised by Patel’s resignation. He said that no self-respecting scholar or academic can work in the current central government. “19 November was the day of reckoning. Patel should have resigned on that day. Patel may have thought that government will re-trace its steps. I knew it would not. Good, he quit before another humiliating meeting,” Chidambaram wrote on Twitter.  

November 19 was the day of reckoning. Dr Patel should have resigned on that day.

— P. Chidambaram (@PChidambaram_IN) December 10, 2018

Question mark on next RBI board meet as RBI guv quits 9 months before end of tenure

Urjit Patel, 54, quit the post about nine months before his three-year term was to come to an end in September 2019. He stepped down just ahead of the scheduled meeting of the RBI Board meeting on 14 December to consider proposals like RBI governance and providing liquidity for Non-Banking Financial Companies (NBFCs).

Patel, who was the Deputy Governor of the RBI before being elevated to the post of RBI Governor, had succeeded Raghuram Rajan after the latter’s term ended in September 2016.

Urjit Patel’s resignation is a statement of dissent: Raghuram Rajan

Urjit Patel’s predecessor Raghuram Rajan who has been open in his criticism of Modi government’s economic policies including demonetisation said in an interview that the RBI governor’s resignation a matter of serious concern and a strong statement of dissent.

‘Believed that all issues had been resolved in the board meeting,’ says former RBI governor C Rangarajan

Former RBI governor C Rangarajan said that he had believed that all issues between the government and the RBI governor were resolved in the last board meeting. He also hoped that the Centre came out with a clarification on this soon.

Hope the Govt comes out to clarify why Urjit Patel has resigned as the @RBI
Governor: Former RBI Governor C Rangarajan #RBIGuvQuits @ShereenBhan @latha_venkatesh pic.twitter.com/jqWw29YHQG

— CNBC-TV18 (@CNBCTV18News) December 10, 2018

S Gurumurthy expresses shock at Patel’s resignation, says previous meeting with RBI governor was ‘cordial’

RBI’s independent director and RSS ideologue S Gurumurthy expressed shock at Patel’s resignation saying that it was unexpected as the previous meeting with the RBI governor was held in such a “cordial atmosphere”. 

Surprised at the news that RBI governor has resigned. The previous meeting was held in such cordial atmosphere that it comes as a shock. All directors said media had created a wrong perception while inside it was totally different. That makes it even more surprising

— S Gurumurthy (@sgurumurthy) December 10, 2018

‘All Indians should be concerned by Patel’s resignation,’ says former RBI governor Raghuram Rajan 

Reacting on Patel’s resignation, former RBI Governor Raghuram Rajan said that, “All Indians should be concerned about governor Patel’s resignation,” Reuters reported.

Narendra Modi praises Urjit Patel, says RBI governor steered banking system form ‘chaos to order’

Modi called Patel “an economist of a very high calibre with a deep and insightful understanding of macroeconomic issues”. He praised the RBI governor for steering the banking system from “chaos to order” and for bringing financial stability in the country.

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.

— Narendra Modi (@narendramodi) December 10, 2018

Dr. Urjit Patel is a thorough professional with impeccable integrity. 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.

— Narendra Modi (@narendramodi) December 10, 2018

Arun Jaitley thanks Urjit Patel for his services, says it was a pleasure to benefit from his scholarship

The finance minister took to Twitter to thank the RBI governor and wished him best for ‘many more years of public service’.

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. (1/2)

— Arun Jaitley (@arunjaitley) December 10, 2018

Govt has succeeded in crushing another institution: Arun Shourie

Former World Bank economist and BJP leader Arun Shourie told CNBCTV18, “Urjit Singh’s departure is yet another signal that the government has succeeded in crushing another institution.”

#RBIGuvQuits | Feel departure yet another signal that Govt has succeeded in crushing another institution, says Arun Shourie, Fmr Divestment Minister #RBI pic.twitter.com/wH7GVW3bQv

— CNBC-TV18 (@CNBCTV18Live) December 10, 2018

Centre and RBI rift had widened after Viral Acharya’s remarks; dy governor had warned against undermining central bank’s independence

The government and the RBI have been fighting for weeks over how much autonomy the RBI should have as the central administration had reportedly sought to reduce curbs on lending and to gain access to the RBI’s surplus reserves. The rift worsened in October when one of the bank’s deputy governors Viral Acharya said in a speech that undermining central bank independence could be “potentially catastrophic”.

Congress says ‘another one bites the dust’; calls out ‘Chowkidar’s attempt to ‘assault’ democratic institutions

Soon after the RBI governor Urjit Patel tendered his resignation, the Congress launched a sharp attack on the BJP, directly calling out the Prime Minister Narendra Modi (referring to him as ‘chowkidar’) for ‘assaulting’ democratic institutions. 

Was the RBI governor’s resignation imminent? 

After weeks of speculation and ‘will he?-won’t he?’, Urjit Patel tendered his resignation from the post on Monday afternoon, just a day before the crucial state Assembly election results in five states.

There have been many instances in the past of acrimony between the central government and the RBI governor after questions were raised on the autonomy of the central bank.

RBI governor steps down citing ‘personal reasons’, thanks colleagues, Board of Directors 

Urjit Patel in his resignation letter wrote: “On account of personal reasons, I have decided to step down from my current position effective immediately. 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.”

RBI Governor Urjit Patel resigns

Patel on Monday announced his decision to step down on Monday with immediate effect citing “personal reasons”. His resignation comes in weeks after the finance minister Arun Jaitley met the RBI board of directors in a marathon meeting on 19 November.