New Delhi: The clash between the Reserve Bank of India (RBI) and the government is not new. On some occasions, RBI governors resigned, many times the worsening thing happened. One look at those governors who resigned from the post.
Referring to personal reasons, RBI Governor Urjit Patel resigned from his post on December 10, 2018. It is believed that the resignation is the result of differences between Patel and the central government. According to the experts, there was confrontation between the two sides on the issue of autonomy.
What was the dispute?
According to the media reports, the finance ministry was thinking about implementing section seven of the Reserve Bank of India law. This section gives the right to direct Governor of the bank on the issues of public interest. It was also said that the government is demanding more than Rs 3 lakh crore from the bank, which is opposing by the RBI.
RN Malhotra was the governor of RBI from February 1985 to December 1990. The VP Singh government extended the term of Malhotra. But after the VP Singh, in the Chandrashekhar government at the Center, the Governor left his post due to the differences between Finance Minister Yashwant Sinha. Subsequently, S Venkataraman was appointed Governor of the Central Bank.
Sir Bengal Rama Rau
The first case of resignation in the history of the RBI was in the year 1957, of Sir Bénengal Rama Rau. There were differences on many issues between Ram Rau’s then finance minister TT Krishnamachari. Finance Minister Krishnamachari called the RBI indirectly working under the Ministry of Finance, after which Rama Rau expressed his inability to work before Prime Minister Jawaharlal Nehru and resigned from the post.
The daughter of former Prime Minister Manmohan Singh had disclosed in her book that Manmohan Singh had resigned from the governorship of the RBI in 1984. Actually, the Union Cabinet had approved the withdrawal of powers from the RBI to issue licenses to foreign banks. But the government did not accept Singh’s resignation and rejected the cabinet resolution, after which Manmohan Singh completed his term.