Subramanian Swamy, a baiter of previous RBI governor Raghuram Rajan, says Urjit Patel should not be allowed to quit.
New Delhi: A top ally of Indian Prime Minister Narendra Modi, who was key in a campaign to oust a former central bank chief, has come out in support of Governor Urjit Patel in his current dispute with the government.
Subramanian Swamy — a member of Modi’s ruling party whose criticism of Raghuram Rajan and the absence of any backing from the government contributed to him not seeking a second term as central bank chief in 2016 — said Patel should remain in his post. That followed a week of drama as the central bank stands its ground in cleaning up a banking system saddled with bad debt, while the government pushes for easier lending rules for some of the weakest banks.
Swamy said if Patel resigned then it would be a “direct consequence” of Finance Minister Arun Jaitley’s comments effectively blaming the central bank for bad loans.
If RBI governor resigns then it is a direct consequence of FM blaming him publicly yesterday for NPAs. Patel is a self respecting scholar of economics(Ph.D in Banking from Yale). He should be persuaded to stay.
— Subramanian Swamy (@Swamy39) October 31, 2018
“Patel is a self-respecting scholar of economics (Ph.D in Banking from Yale),” Swamy said via a Twitter post. “He should be persuaded to stay.”
The tweet from the key Rajan-baiter marks the first time a lawmaker formally made a reference to reports that Patel was considering to step down over growing friction with the government. The differences spilled out to the open when Deputy Governor Viral Acharya made a hard-hitting speech last week, in which he warned that toying with the central bank’s independence could lead to dire consequences.
The Finance Ministry said in a statement on Wednesday it respects the autonomy of the Reserve Bank of India. That was after news broke that government officials had written letters to Patel, citing special powers the state has over the central bank, which if invoked, could lead to the government directing the RBI to do its bidding.
Leading the Battle
Patel was initially seen as being more supportive of Modi’s policies, including a decision to void 86 percent of currency in circulation in 2016. He has come a long way from those cash ban days, and is now seen as leading the battle to clean up the banking sector.
His fight to ensure a healthier banking sector, which currently has the dubious distinction of having one of the highest stressed asset ratios in the world, is riling some in the political leadership. They want delinquency norms eased for companies and harsh lending strictures imposed on weak state-run banks lifted so that demand for loans picks up and boosts growth before an election year.
But the governor has held his ground so far, much like Rajan who served only one term before returning to the University of Chicago.
“Like his predecessors, Patel has deftly navigated the RBI through treacherous economic and political minefields,” said Eswar Prasad, who teaches at Cornell University and has worked with both Rajan and Patel. “However, concerted and persistent attacks from the government on different fronts will undercut Patel’s effectiveness and that of the central bank, to the detriment of the Indian economy.”
Of course Urjit Patel should not be allowed to leave. Who will be left to take the blame then? Shakti Kanta Das was the lucky guy who retired just in time, though he was the one who oversaw and connived to all the economic turmoil. That man should be now FORCED to become the RBI chief now. He didn’t have the guts then to talk like an economist, let him get one more chance. We will also know if he knew anything about this subject in the first place or was just a sycophant fraud.
Automony of the RBI should be upheld as netas do not know economics and also they are least interested to learn.