Reacting to Urjit Patel’s decision to step down as Reserve Bank of India (RBI) governor, Raghuram Rajan on Monday called his resignation a statement of dissent and cautioned government to preserve the autonomy and credibility of the central bank.
It’s a statement of dissent and therefore, the government has to be very careful in dealing with it such as the autonomy of the institution as well as its credibility is preserved, Rajan said.
“I do think this is a serious issue, it needs to be dealt with carefully. The government has to ask what lead to this resignation. Resignations are not frequent at the RBI," Rajan told CNBC-TV18.
This is probably only the second resignation in its history maybe the first explicit resignation and therefore, we have to look at the circumstances that lead to it, he added.
"In all these cases you have to read between the lines. It may well be that health is involved but we also have to look at the circumstances in which this decision has been made and ask what prompted it," Rajan said, adding, "I think it is useful to go over the kind of dialogue that has taken place over the last few weeks and ask if there is anything that could have prompted such a statement."