RBI board to corner Urjit Patel

Reserve Bank of India Governor Urjit Patel arrives for a news conference at the bank's head office in Mumbai

Reserve Bank of India Governor Urjit Patel arrives for a news conference at the bank's head office in Mumbai

Also emphasising on the important role of the RBI board in managing the standoff between the bank and the government, he said: "The role of the RBI board is not operational but to coach".

While Gandhi has accused the government of "destroying" institutions with its alleged strong arm tactics, the differences between the Modi government and the RBI came out in public domain after a deputy governor raised concerns about the central bank's autonomy and warned that the governments that did not respect the central bank's independence would sooner or later incur the wrath of financial markets.

RBI Governor Urjit Patel might resign from his position on November 19 due to health issues and the ongoing spat with the government, reports suggested. This indicated that the RBI board meeting on November 19 was likely to be stormy.

Acknowledging that the Reserve Bank of India (RBI) listened and considered all proposals of the Central government, former RBI Governor Raghuram Rajan said the apex bank always took decisions based on national interests. It has also opposed injecting more liquidity into the economy to avoid a tussle between housing and finance companies. "It has to listen, of course, but at the end, it has to make a decision because ultimately it has that responsibility", he said. The reports of rift between the RBI and the government surfaced last month after the Finance Ministry reportedly started discussions with the RBI under the never before used Section 7 of the RBI Act.

"I think certainly it would be best if both sides respected each other's motivation and thoughts. the RBI after listening to the government has provided the best professional answer. and historically it has done that", he said. "As a driver, the driver being the government, it has the possibility of not putting on a seat belt, but of course if you do not put on your seat belt you get into an accident and the accident can be quite severe", he said.

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