Every Institution Needs to Have Autonomy & Integrity: New RBI Guv
RBI Governor Urjit Patel steps down from his position
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Addressing the media on Wednesday, 12 December, newly appointed RBI Governor Shaktikanta Das said, “Every institution needs to have integrity and autonomy but also needs to be accountable.”
“I will try and uphold professionalism, core values, credibility and autonomy of this institution. It’s an honour and great opportunity to serve RBI. I will try my best to work with everyone and work in the interest of Indian economy,” he added.
He also said that he will convene a meeting of MDs and CEOs of public sector banks on Thursday in Mumbai.
- RBI Governor Urjit Patel stepped down with immediate effect
- Patel cited “personal reasons” for his resignation
- He is the first RBI governor since 1990 to have quit before completion of term
Every Institution Needs to Have Autonomy & Integrity, Says Shaktikanta Das
The newly appointed RBI governor Shaktikanta Das addressed the media on Wednesday, 12 December.
“I will try and uphold professionalism, core values, credibility and autonomy of this institution. It’s an honour and great opportunity to serve RBI. I will try my best to work with everyone and work in the interest of Indian economy, “ he said.
Shaktikanta Das Assumes Charge as New RBI Governor
The newly appointed RBI Governor Shaktikanta assumed office today, after former governor Urjit Patel resigned in a shock move on 10 December.
Das confirmed the news on his twitter, thanking everyone for the wishes and blessings.
Sensex Jumps Over 300 Points After Appointment of New RBI Guv
Rising for the second straight session, the equity benchmark BSE Sensex on Wednesday advanced over 300 points in early trade after former bureaucrat Shaktikanta Das was named as the new governor of the RBI.
The NSE Nifty too rose by 98.50 points, or 0.93 percent, to 10,647.65.
Top gainers on the BSE include Yes Bank HeroMotocorp, Bharati Airtel, M&M, Tata Steel, Kotak Bank, Tata Motors and Axis Bank.
Brokers said investor sentiment got a boost after the appointment of the new RBI Governor on hopes that it will now address the liquidity issue and could help public sector banks in their recapitalisation programme, besides helping in stabilising short-term investor sentiment.
The Sensex had on Tuesday rose 190.29 points to end at 35,150.01, after falling over 500 points intra-day. And the broader NSE Nifty rose 60.70 points to end at 10,549.15.
Asian market rallied in the morning trade after the US President Donald Trump appeared hopeful of a trade deal with China. Japan's Nikkei was trading higher by 1.96 per cent and Shanghai Composite Index 0.20 percent.
Shaktikanta Das as RBI Governor is a Wrong Choice: Subramanian Swamy
BJP leader Subramanian Swamy, on Wednesday gave his opinion on the appointment of the new RBI governor Shaktikanta Das, saying that the appointment is wrong. He said that the new RBI governor has worked closely on corrupt activities with former finance minister P Chidambaram and has also tried to save Chidambaram in court cases.
FICCI Welcomes Das as 'Great Choice'
Commenting on Das’ appointment, FICCI President Rashesh Shah said "It's a great choice. Mr Das has a 360-degree understanding of the financial issues facing the Indian economy and he also understands global issues due to his involvement with G20.”
Industry Expects Das to Address Liquidity Issue Urgently: CII
Industry body CII said the appointment of former bureaucrat Shaktikanta Das as the new RBI Governor comes as a huge sentiment booster to the industry and expressed confidence that he will take urgent steps to address the liquidity squeeze in economy.
He said the Industry was confident that the liquidity squeeze in the banking and non-banking financial sector, which is spilling over to the various segments of industry would be taken up with all urgency by Das and there would be seamless flow of credit to industry and trade, especially to the MSMEs.
Shaktikanta Das is the New RBI Guv
Former Finance Secretary Shaktikanta Das has been appointed as the new RBI Governor.
A former economic affairs secretary from 2015 to 2017, Das worked closely with the central bank. He is currently a member of the Finance Commission of India, and the government’s representative at the Group of 20 summits. PM Modi initially brought Das into the Finance Ministry to head the revenue department, later moving him to economic affairs, where he helped to spearhead the prime minister’s controversial demonetisation drive in 2016.
RBI's Institutional Capabilities Very Strong, Says Niti Aayog
A day after Urjit Patel resigned as RBI Governor, Niti Aayog Vice Chairman Rajiv Kumar Tuesday said the central bank's institutional capabilities are 'very strong' and it will do whatever is required for the markets and economy.
Kumar further said although Patel has done an amazing work in the last two years as the RBI Governor, the functioning of the central bank is not dependent on any particular individual.
"RBI's institutional capabilities are very strong and they will do whatever is required for the markets and economy.
"The fact is that RBI itself is such a professional institution, and such a long-standing institution that you know, the business will continue," Kumar said on the sidelines of 'Inclusive Finance India Summit' here.
Patel, who had a run-in with the government over autonomy of the central bank, resigned from his job on Monday, citing personal reasons.
The Niti Aayog vice chairman also assured that the government will do whatever is required to continue its business as usual.
"Patel has done an amazing work in the last two years...But RBI is not dependent on any one particular individual," Kumar said.
Govt Likely to Make Announcement on RBI Soon: Finance Secretary
The government is likely to make an announcement regarding Urjit Patel's successor as Reserve Bank of India's Governor later in the day, Finance Secretary A N Jha said.
RBI has been rendered headless following Patel's unexpected resignation, with immediate effect, Monday.
Patel, who is the first governor since 1990 to step down before his term ends, in a brief statement, cited "personal reasons" for the decision.
The decision to quit comes four days ahead of a crucial meeting of the board of the central bank that could have discussed issues of simmering differences with the government.
It is expected that the board meeting may be deferred as there is no regular governor.
Speaking to reporters, Jha said, some communication from the government on RBI is expected.
Patel's three-year term was to end in September 2019, and he was eligible for a second term like most of his successors, barring a few like his outspoken predecessor Raghuram Rajan.
A Kenyan national who acquired an Indian citizenship prior to being appointed Deputy Governor of RBI in January 2013, Oxford-trained Patel was initially seen as toeing government line after he backed the November 2016 shock decision to overnight junk 86 per cent of the currency in circulation.
Jaitley Intimated of Patel's Decision Only "Minutes Before"
A highly-placed source told Business Standard that none of the senior minister in PM Modi’s cabinet had any inkling of Urjit Patel’s decision to step down as RBI governor. In fact, even Finance Minister Arun Jaitley was informed of Patel’s decision only “minutes in advance”, the source told Business Standard.
Govt to Take Decision on New RBI Governor Today
Finance Secretary AN Jha said the government will take stock of the legal position regarding the appointment of a new RBI governor today, including the possibility of an interim head.
Former Finance Secy Shaktikanta Das May Take Over as RBI Guv, Vishwanathan May Be Made Interim Head
Quoting sources, CNBC-TV18 reported that former Finance Secretary Shaktikanta Das is a possible contender for RBI Governor. Das is currently a member of the Finance Commission.
News agency PTI reported N S Vishwanathan, senior most deputy governor, may be made interim head of the RBI following the unexpected resignation of Urjit Patel, according to sources.
Vishwanathan was appointed as RBI Deputy Governor on July 4, 2016 for a period of three years.
If appointed interim head, Vishwanathan would head the central board meeting scheduled this Friday, the sources said.
The Friday meeting is considered crucial as it is going to take up governance issue and concerns on liquidity and credit flow to productive sectors, especially Micro, Small & Medium Enterprises (MSME).
According to the sources, the important institution like the RBI cannot be headless for long and the government will soon initiate the process for finding replacement of Patel.
The other three deputy governors are Viral Acharya, B P Kanungo and M K Jain. Both Vishwanathan and Kanungo are career central bankers.
Patel, who had a run in with the government over autonomy of the central bank, resigned Monday from his post citing "personal reasons", creating a crisis in the RBI.
In a brief statement, Patel said he has decided to step down with immediate effect.
Patel was appointed the 24th Governor of the RBI on September, 2016 for a three-year term.
Commenting on the Governor's resignation, Finance Minister Arun Jaitley said the government acknowledges with deep sense of appreciation the services rendered by Patel to this country both in his capacity as the Governor and the Deputy Governor of the RBI.
"It was a pleasure for me to deal with him and benefit from his scholarship," he said.
Speculation of Resignation Since 31 October, Says CLSA
Brokerage company CLSA put out a note after the resignation. Here is the full statement of the note:
There were media speculations since the October 31st that Mr Urjit Patel may resign due to differences with the Government. The issue ‘appeared’ resolved after the previous RBI board meeting on the 19th November.
The abruptness of this resignation (immediate effect and the Governor thanking only the RBI directors and employees and not the Govt) will likely fuel speculations about RBI’s autonomy issues and the Govt credibility in general.
Financial markets are likely to see this abrupt development negatively. The currency is already depreciated by 1.5% after the India market closure (5pm) in the non-deliverable forward offshore market. But when the spot market opens tomorrow, RBI may intervene in the currency market. Also the SGX Nifty is down 1.2% on today’s close (which was already down 2% today). The 10-year g Sec yield already moved up by 12 bps during the course of the day today.
On the positive side, the market may begin to factor in easier monetary policy / liquidity developments.
The next Governor’s appointment will be crucial in restoring the credibility of the Govt and the RBI.
But this development comes on the eve of the state elections results due tomorrow and the exit polls paint a ‘not so optimistic’ outcome for the ruling BJP party. If the BJP ends up losing the states of Rajasthan (as predicted by the exit polls) and MP (where the exit polls predict a close finish), the equity markets could react –vely as the joint impact of these developments.
Former PM Manmohan Singh Issues Statement on Patel's Resignation
Here is the full text of Manmohan Singh’s statement:
It is with great sadness that I received the news of the resignation of the governor of the Reserve Bank of india, Dr. Urjit Patel.
I have known Dr. Patel to be an economist of high repute and also someone who cared deeply about India's financial institutions and economic policy. Dr. Patel's sudden resignation, at a time when the Indian economy is faced with many headwinds is very unfortunate and is a severe blow to the nation's economy.
There have been apprehensions expressed earlier by the Deputy Governor of the RBI about the government's intent to raid the capital reserves of the RBI for fiscal purposes. I hope the resignation of the Governor is not a sign that this may soon becone a reality.
Building institutions take a long time and effort but they can be destroyed in a whimper. It is institutions such as the RBI, among many others that have served as the edifice of our great nation's progress since Independence. it will be foolhardy to diminish these institutions for short-term political gains.
I wish Dr. Urjit Patel success in his future endeavours. I also sincerely hope that this sudden resignation of the Governor is not a harbinger of the Modi government's attempts to destroy the institutional foundations of India's $3 trillion economy.
High-Level Panel Headed By Cabinet Secretary To Select Next RBI Governor
The successor of Urjit Patel, who surprisingly resigned as RBI Governor with immediate effect, will be found by a high-level panel headed by the Cabinet Secretary.
Once the panel finalises the name, it will be sent to the Appointments Committee of the Cabinet headed by Prime Minister Narendra Modi.
According to sources, the government will soon initiate the process for appointment of new RBI Governor following the sudden resignation of Patel on Monday.
The Financial Sector Regulatory Appointment Search Committee (FSRASC) is headed by Cabinet Secretary P K Sinha. Apart from him, the panel includes Additional Principal Secretary to the Prime Minister P K Mishra, who is a permanent government nominee, and three other experts, among others. As per the process, the panel will invite applications from eligible candidates and based on interactions with them will select the candidate.
The appointment would be made by the central government on the recommendation of the FSRASC. It is noted that the FSRASC is free to identify and recommend any other person also, on the basis of merit, who has not applied for the post.
This process was followed for the selection of Sebi chairman Ajay Tyagi and IRDAI chairman S C Khuntia.
As per the RBI Act, the central bank should have one governor and four deputy governors - two from within the ranks and one commercial banker and another an economist to head the monetary policy department.
(PTI)
Rupee Forwards Slump After Resignation
The money markets took a hit on Monday as Rupee forwards posted their biggest daily slump in more than five years soon after Patel’s resignation.
The one-month contract was last quoted at 72.62 per dollar compared to a spot market rate of 71.35 percent dollar.
Meanwhile ratings agency Moody's has said it would consider any signs of the government's attempts to curtail the central bank's independence to be credit negative.
Viral Acharya Not Resigning, Says RBI Spokesperson
“Viral Acharya has not resigned as Deputy Governor of RBI & does not intend to resign either”, news agency ANI reported quoting RBI spokesperson
There were rumours that Deputy Governor Viral Acharya may follow Patel’s suit and tender his resignation
Former Governor Patel Issues Statement
"Economist Of Very High Calibre," Says Modi; Jaitley Appreciates Patel's Services
Prime Minister Narendra Modi praised Patel’s integrity in his tweets, hailing him as “an economist of a very high calibre.” He also credited Patel with steering “the banking system from chaos to order”.
Finance Minister Arun Jaitley also tweeted in acknowledgement of the former governor’s services.
'Anarchy, Tyranny, Shocked, Proud': Reactions to Patel's Resignation Pour in
Reacting to the resignation, Patel’s predecessor Raghuram Rajan said, “All Indians should be concerned about Governor Patel's resignation.”
Congress President Rahul Gandhi said, “RBI Governor resigns because he was trying to save the institution but he couldn’t. I am proud of people who are standing upon against the government.We are not going to tolerate what happened in CBI and RBI.”
“In the middle of the meeting (of opposition leaders),we were told that RBI Governor has resigned because he could no longer work with govt. There was consensus in the room that we've to stop BJP's assault on our institutions- CBI, RBI, EC and on the constitution,” Gandhi added.
He also tweeted saying, the resignation signals the falling of an independent institution.
Former Finance Minister P Chidambaram said he was saddened but not surprised at the resignation. “It’s good that the RBI governor quit before another humiliating meeting," news agency Reuters quoted Chidambaram as saying.
Former Union Minister and Economist Arun Shourie said, “I don’t know the personal reason but his departure will be a signal that the government has crushed another institution. RBI becomes another CBI.”
Congress spokesperson Randeep Surjewala in a tweet said the RBI’s integrity “stands denigrated by a tyrannical Modi regime.”
Surjewala also said the resignation shows that India’s “economic independence is under serious threat under Modi government”
RBI board member S Gurumurthy tweeted the resignation comes as a shock
'Another One Bites the Dust', Says Congress
“Governor Urjit Patel should not have resigned at a time when most of the controversial issues have been discussed and decided,” news agency Reuters quoted RBI board member Sachin Chaturvedi as saying
Reacting on the resignation, Congress leader Kapil Sibal said, “ People he (PM) appointed are resigning, first Arvind Subramanian left as CEO and now it's Urjit Patel. Economy is suffering, Modi thinks that he’s the biggest economist and he doesn’t need them, so they are resigning.”
West Bengal Chief Minister termed the development as a ‘financial and economic emergency’
Delhi Chief Minister too reacted strongly
Shiv Sena supremo Uddhav Thackeray also targeted the government saying, “भले ही उन्होंने व्यक्तिगत कारण बताकर इस्तीफा दिया हो लेकिन सरकार बार बार किसीको नियुक्त करने और हटाने का नाटक करने के बजाए एक ही बार फैसला कर पूरे रिजर्व बैंक को कब्जे में ले ले (He might have quit citing personal reasons but the government should get rid of this drama of appointing and removing someone. It should rather take control of the RBI all at once).
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