Urjit Patel May Resign As RBI Governor On November 19: Report

As per an online financial publication report, RBI governor Urjit Patel may put down his papers at the central bank's next board meeting on November 19, in case the rift between the centre and RBI escalates further. The report citing sources said Urjit Patel is tired of the conflict with the government and it is taking a big toll on his health.

The tensions brew between the RBI and central government after RBI Deputy Governor Viral Acharya said that undermining central bank independence could be "potentially catastrophic". Off late the government is taking a stand for relaxing RBI's MSME lending guidelines and gain access to surplus reserves of the central bank which can be employed towards public expenditure.

Further as per the Reuters report on Tuesday, the government will continue to press its demands even if it means provoking a resignation by RBI governor Urjit Patel. Moreover the report citing government officials said they are highly annoyed by RBI's unwillingness to accept its demands.

The central bank is constantly denying the government's call to provide funds from its surplus reserves and thereby fund the fiscal deficit, the report added.

Raghuram Rajan, former RBI governor, in an exclusive interview on Tuesday said during his term also he used to receive "innumerable letters" from the centre which said "relax this, relax that".

Also, as per the Reuters report, the government intends to lower down restrictions on NBFCs while the at the same increase lending to MSMEs so as to negate the impact of economic headwinds due to high fuel prices and low farm prices just ahead of the state elections in few weeks time and general assembly election due next year in May.

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