The Central government is likely to make an announcement regarding Urjit Patel’s successor as Reserve Bank of India’s Governor on Tuesday. Finance Secretary AN Jha said a communication from the government on new RBI Governor was expected later in the day, PTI reported.
Patel is the first RBI Governor since 1990 to step down before the end of his term. RBI is without a head following his unexpected resignation on Monday, “with immediate effect”.
In a brief statement, he cited “personal reasons” for the decision to quit the central bank. His three-year term was to end in September 2019. Barring a few like his predecessor Raghuram Rajan, most RBI Governors had been given a second term.
Patel, 55, had succeeded Raghuram Rajan as the RBI Governor on 4 September 2016.
His decision to quit came days ahead of a crucial board meeting that was likely to discuss issues pertaining to simmering differences with the government.
The RBI and the central government had a rift over the issue of bad loans and appropriate size of reserves that the central bank must hold.
In a 9-hour-long meeting between the government and the RBI on 20 November, the two sides agreed to refer to an expert committee the contentious issue of reserves, while restructuring of stressed loans of small businesses would be considered by the central bank.
The board meeting will now be deferred in all probability in the absence of a regular governor.
Oxford-trained Patel was a Kenyan national who acquired an Indian citizenship before his appointment as the Deputy Governor of RBI in January 2013. He had supported the government’s November 2016 surprise decision to overnight declare Rs 500 and Rs 1000 notes as illegal tender.