Administration Finance

Arun Jaitley on Urjit Patel: Never asked RBI Governor to resign

Rejecting the central government’s role in the resignation of Reserve Bank of India Governor Urjit Patel, Finance Minister Arun Jaitley said Tuesday that the government did not ask him to step down from his post.

 “The government never called for his resignation,” Jaitley said at an event, according to a PTI report.

The finance minister also stated that the government does not need a single penny from the RBI’s capital reserves during the current fiscal. Jaitley said the matter of RBI reserves was cordially discussed between the government and the central bank during the RBI’s board meeting.

Patel had resigned from the Governor’s post on December 11 citing personal reasons. Former bureaucrat Shaktikanta Das was appointed as the RBI Governor two days after Patel resigned.

The Indian Express on November 6 had published on the rift between the Centre and RBI over a proposal by the Finance Ministry seeking to transfer a surplus of Rs 3.6 lakh crore—more than a third of the total reserves of the central bank—to the government. The government believed that, when compared with global central banks, the RBI holds much higher total capital as a percentage of its total assets, at about 28 percent.

Earlier, on October 26, RBI Deputy Governor Viral Acharya had said how a transfer of excess reserves from a central bank to the government could be “catastrophic”.