New Delhi: Reserve Bank of India (RBI) spokesperson on Monday dismissed media reports of RBI Deputy Governor Viral Acharya’s resignation and said they were ‘baseless’ and ‘incorrect’.
Terming the reports as ‘baseless rumours’, the RBI denied the speculations surrounding the stepping down of Acharya. The speculations came within minutes of Urjit Patel announcing his resignation.
Acharya had made the October 26 speech on the need to preserve the autonomy of the RBI, which got the soured central bank-government relationship out into the public domain. In the over 90-minute long speech, Acharya, who is in charge of the monetary policy department, warned of the wrath of the markets if the autonomy of a central bank is compromised.
Acharya had explicitly said he had the backing of Patel for making the speech.
Urjit Patel stepped down as the Governor of the RBI on Tuesday, as per media reports. Patel tendered his resignation citing personal reasons.
“On account of personal reasons, I have decided to step down from my current position (RBI Governor) effective immediately. It has been my privilege and honour to serve in the Reserve Bank of India in various capacities over the years,” he said.
“The support and hard work of RBI staff, officers and management have been a proximate driver of Bank’s considerable accomplishments in recent years. I take this opportunity to express gratitude to my colleagues and Directors of RBI Central Board and wish them all the best for future,” Patel added.
Notably, tensions between the RBI and the government have recently, with the Finance Ministry initiating discussion under the never-used-before Section 7 of the RBI Act which empowers the government to issue directions to the RBI Governor.
Section 7 of the RBI Act says “the central government may from time to time give such directions to the bank as it may, after consultation with the Governor of the Bank, consider necessary in the public interest”.
However, it was reported the central bank and the government have reached a common ground on several issues to bring the standoff to an end during the last board meeting of the central meeting.