Dependence day

10 December 2018 By Una Galani Follow @ugalani

Urjit Patel’s resignation after a spat with New Delhi makes him the second chief to leave in almost as many years. That removes the illusion of independence. Finding a successor will be tough too. Investors will now significantly reprice risk as India hurtles into elections.

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India’s central bank governor, Urjit Patel, resigned on Dec. 10, effective immediately. In a statement issued by the Reserve Bank of India and signed by Patel, he cited ‘personal reasons’ for the departure.

Patel took the helm of the RBI in September 2016, replacing Raghuram Rajan. Patel’s term as governor had been due to end in September 2019.

RBI Deputy Governor Viral Acharya said in a speech in October that undermining a central bank's autonomy could be "catastrophic".

India’s government issued a statement on Oct. 31 saying the autonomy of the central bank was “essential”, responding to television reports that Patel might resign if the government invoked a never-before-used rule under the RBI Act to direct the actions of the central bank.

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