Chennai: The present scenario between the government and the reserve bank of India can best be termed stiff and reports are doing rounds stating that RBI Governor Urjit Patel may quit at the next board meeting of the apex bank to be held on 19 November.
The fight has been over the the autonomy of the RBI as the administration of Prime Minister Modi seeks to reduce curbs on lending and to gain access to RBI’s surplus reserves.
A report from online financial publication Moneylife, on Wednesday reported that Urjit Patel could resign at the central bank’s next board meeting, citing sources in touch with the Governor.
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.
The rift worsened late last month when one of the bank’s Deputy Governors said in a speech that undermining central bank independence could be “potentially catastrophic”.
Moneylife’s report said if the feud escalates further, there is “a good chance” Patel will resign at the RBI’s next meeting, saying he was tired of the struggle with the government, and it was having a negative impact on his health. The report did not cite the number of sources.
Reuters had reported on Tuesday that the government intends to keep pressing its demands even if it risks provoking a resignation by Patel, according to three sources familiar with the government’s thinking.