Table of Contents
THE HUGE RESIGNATION
Reserve Bank of India Governor Urjit Patel resigned
REACTIONS
RAGHURAM RAJAN
Urjit Patel took over from Raghuram Rajan in 2016, just two months before Prime Minister Narendra Modi’s colossal demonetization move. Raghuram Rajan said the resignation by a government servant is a “note of protest”. Urjit Patel was widely expected to quit for weeks, though his term officially ends next month. The term of office typically runs for 3 years. (Can be extended)
URJIT PATEL
Urjit Patel, 55, who took over as the 24th Governor of the central bank on September 5, 2016, had the shortest tenure since 1992.
WHY?
NPA issue PCA framework The sword of Section 7 RBI’s surplus funds
SHORT TERM GOALS OF GOVERNMENT
The government had sought a special refinance window for mutual funds, NBFCs and housing finance companies; a facility for banks to raise $30 billion overseas; a relaxation in the limits on corporate bonds for foreign portfolio investors; and easier mandatory hedging requirements for infrastructure loans of less than 10 years. In the interest of long-term financial health of the country, the RBI does not want to ease controls to help government achieve short-term goals of economic growth.
IMPACT WILL BE VERY NEGATIVE
Stock market can witness fall Investors will be worried Future investments will be impacted
WHO WILL BE THE NEXT RBI GOVERNOR
- The RBI Act, 1934 says –
- If the Governor or a Deputy Governor by infirmity or otherwise is rendered incapable of executing his duties or is absent on leave or otherwise in circumstances not involving the vacation of his appointment, the Central Government may, after consideration of the recommendations made by the Central Board in this behalf, appoint another person to officiate for him…
- This could also include an officer or employee of the bank, says the law
There are four deputy governors in the RBI – NS Vishwanathan, Viral Acharya, BP Kanungo, MK Jain, and 12 executive directors.
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