Urjit Patel reveals what made him abrupt exit as RBI Governor

Urjit Patel

Chennai: Nearly two years after his resignation as the Governor of the Reserve Bank of India, Urjit Patel, in his book Overdraft—Saving the Indian Saver released on Friday, has said that attempts to dilute a new bankruptcy law caused disagreements between the Union government and the apex bank, leading to his resignation.

“Instead of buttressing and future-proofing the gains thus far, an atmosphere to go easy on the pedal ensued,” he said in the book.

“Until then, for the most part, the finance minister and I were on the same page, with frequent conversations on enhancing the landmark legislation’s operational efficiency,” he added.

Patel said the government was probably of the view that the deterrence effect— future defaulters beware, you may lose your business had been achieved. Stating that there were requests for rolling back the February circular, he said that a canard was spread to discredit the rules, including by incorrectly suggesting that small businesses would suffer disproportionately.

“Since the time-bound threat of insolvency application is not credible anymore, it is unclear what threat points will compel resolution in 180 days (or, for that matter, even 365 days),” he said.

Patel, who resigned eight months before the end of his term, faced the rare threat of the government invoking a never-used provision to issue a directive to RBI.

 

NT Bureau