MUMBAI: Prime Minister Narendra Modi on Tuesday tried to put to rest the controversy over former Reserve Bank of India governor Urjit Patel’s resignation, saying that he had decided to quit due to personal reasons.
“He himself wanted to resign for personal reasons. I am revealing it for the first time. He was telling me about it for the past six-seven months before his resignation. He even gave it in writing,” Modi said in an interview to news agency ANI.
There was no question of political pressure, Modi said, and praised Patel for having done a good job.
After a war or words between the finance ministry and the RBI for months over issues such as central bank autonomy, reserves, and liquidity, Patel quit in December, though not unexpectedly. Patel was not ready to be seen as a governor who bowed down to government pressure after an apparent move by the finance ministry to invoke the never-used Article 7 of the RBI Act.
When asked about disrespect shown to institutions such as the RBI, and accusations of the government wanting to empty the RBI’s coffers, Modi said the Congress did not have any right to talk about that.
Patel, till the time the controversy broke, was seen as being on the government’s side as he had quietly played along with the government on demonetisation.
Speaking about demonetisation, Modi said it was not an unexpected jolt, as the government had given warnings over a period of one year to hoarders of black money to declare their assets and pay penalties.
He said the formal economy was being hollowed out by the parallel economy, and it was vital for the hidden currency notes to come into the banking system.