RBI vs Govt: Timeline of events leading to Urjit Patel resignation
Government has reiterated the need for RBI autonomy as ‘essential’ but called for better governance at the central bank
The following is a timeline of the events in the government- RBI spat, leading to Patel’s sudden resignation 8 Aug, 2018: Government appoints die-hard Sangh ideologue S Gurumurthy, and cooperative banker and Swadeshi supporter Satish Marathe to the RBI’s central board as independent directors.
Mid-Sep: Government cuts short the term of RBI central board member and noted banker Nachiket Mor, who is also associated with the Bill & Melinda Gates Foundation.
10 Oct: Government invokes the never-before-used Section 7 of the RBI Act to force down decisions it wants RBI to take through three letters with over a dozen demands. RBI replies to these letters a week later.
23 Oct: RBI holds a marathon board meet that lasts for around eight hours but remains inconclusive on most issues that government brought in.
26 Oct: Deputy governor Viral Acharya goes public to assert RBI’s autonomy, warns of the wrath of the markets if it is not maintained through a speech.
29 Oct: Another deputy governor NS Vishwanathan delivers a speech in Jamshedpur, making clear RBI’s reluctance to bring down capital levels for banks.
31 Oct: Government reiterates need for RBI autonomy as “essential” but calls for better governance at RBI.
3 Nov: Economic affairs secretary SC Garg cites improvements in market indices, the rupee and crude to make light of Acharya’s “wrath of markets” remarks.
9 Nov: Garg says discussions are on to fix an ‘appropriate economic capital framework for RBI’ and say it government does not want the RBI money.
15 Nov: RSS ideologue and central board member S Gurumurthy says standoff between RBI and government not a “happy thing”.
17 Nov: Ahead of RBI board meeting, finance minister Arun Jaitley says growth should not be throttled by squeezing liquidity to the needy sectors.
19 Nov: A 10-hour RBI central board meeting decides to set up a panel on the economic capital framework for RBI and directs it give forbearances to small businesses.
5 Dec: Governor Urjit Patel refuses to answer queries on frictions between RBI and government, amid reports of truce between the two.
10 Dec: Patel resigns, citing personal reasons.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.
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