India’s central bank governor Urjit Patel has resigned following a tense stand-off with Prime Minister Narendra Modi’s government over the bank’s independence.
In a statement on the Reserve Bank of India’s website, Mr Patel cited “personal reasons” for his decision to step down from a position he has held since September 2016, when he was selected to replace Raghuram Rajan.
In his statement, Mr Patel said his resignation is “effective immediately.”
The resignation is the culmination of long-mounting tensions with Mr Modi’s government. Those erupted into the public view in October, when Mr Patel’s deputy gave an impassioned speech focusing on the need for central bank independence.
His decision comes ahead of what was likely to be a tense meeting on Friday, when the RBI’s governing board will be pushing the RBI to make many concessions to governments.
Mr Patel is the second governor of the Reserve Bank of India to depart amid frictions with the government during Mr Modi’s administration.
His widely-respected predecessor, Mr Rajan, had departed after the government refused to extend his tenure, unhappy with his outspokenness on issues that the administration considered beyond his purview.
Mr Patel’s departure could clear the way for Modi’s government to appoint a more pliant figure, more amenable to its desire to ramp up the economy ahead of expectations next year. But it is likely to unnerve markets and investors, who have counted on a conservative central bank to maintain macroeconomic stability.
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