WEB DESK
If media reports are to be believed Reserve Bank of India RBI Governor Urjit Patel is likely to resign from his post following a breakdown in relations with the government.
Television channels CNBC-TV18 and ET Now cited sources as saying that Patel could quit the post.
The RBI and the finance ministry have not yet responded to the reports.
The government has invoked never-before-used powers under the RBI Act that allow it to issue directions to the central bank governor on matters of public interest, the Economic Times newspaper reported.
It said the government had sent letters to the RBI governor in recent weeks exercising powers under section 7 of the RBI Act on issues ranging from liquidity for non-bank finance companies, capital requirements for weak banks and lending to small- and medium-sized companies.
Tensions between the RBI and the government have spilled into the public domain after Deputy Governor Viral Acharya said last week that undermining central bank independence could be “potentially catastrophic”, indicating the authority is pushing back against government pressure to relax its policies and reduce its powers ahead of a general election due by May.
Adding to the row, Finance Minister Arun Jaitley blamed the central bank for failing to stop a lending spree during 2008-2014 that left banks with $150 billion of bad debt.