RBI governor should work with govt or quit: RSS economic wing head

Reserve Bank of India Governor Urjit Patel should sync with the central government's suggestions to maintain the economic growth of the country or resign, said the chief of Rashtriya Swayamsevak Sangh's economic wing.

Ashwani Mahajan, the chief of Swadeshi Jagran Manch (SJM), said that RBI should not see the suggestions of the government negatively, instead, it should work in coordination with the government because ultimately it is the government that is accountable to the country and not the RBI.

He added that the government has the legal right to exercise powers under the  RBI Act. It allows the government to give directions to the central bank governor on matters of public interest.

"RBI governor Urjit Patel should also restrain his officials from making differences public," Mahajan said. "If he doesn't follow discipline, it would be better for him to resign," he added.

However, Urjit Patel is considering all options for resigning his post due to the increasing differences and breakdown between RBI and the government. The former RBI governor, Raghuram Rajan, had also resigned from his post in 2016 due to political pressure.

The tension between the government and RBI widened when Deputy Governor Viral Acharya said that the interference of government in the independence of the central bank could be "potentially catastrophic," pointing out that the RBI is pushing back hard against government pressure to relax its policies and reduce its powers.

Upset with the governor for publicly speaking about the rift with the government, Union Finance Minister Arun Jaitley had criticised the central bank for its indiscriminate lending which led to the bad loans or non-performing asset (NPAs). 

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