NEW DELHI, Dec 10 (AFP): The head of India's central bank resigned on Monday following a public spat with Prime Minister Narendra Modi's administration about alleged government interference.
Reserve Bank of India (RBI) governor Urjit Patel cited "personal reasons" for his decision, but media reports have said that he was annoyed by repeated government efforts to influence central bank policy.
It comes after Patel's deputy, Viral Acharya, warned the government in a strongly worded speech in October that undermining the bank's independence could be "potentially catastrophic".
Patel's short statement Monday made no mention of the rift, highlighting only what he called the RBI's "considerable accomplishments in recent years".
"On account of personal reasons, I have decided to step down from my current position effective immediately," Patel said in the statement which was posted on the bank's website.
The governor and finance ministry officials were reported to be at loggerheads in recent months over claims that the government was trying to influence the bank's decision-making.
Indian business dailies reported in October and November that Modi's government had invoked never-before-used powers to send at least three letters to Patel seeking to direct policy.
Newspapers suggested that Patel was close to quitting over the issue at the time, but the tension was believed to have been diffused following clear-the-air talks three weeks ago.
"The RBI and the government had numerous differences but Patel's resignation is shocking," Sujan Hajra, an economist at Anand Rathi securities, told AFP.
"There was a belief both were ironing out their differences but the resignation raises issues about the RBI's independence," he added.
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