India’s central bank boss quits amid rift with government

Indian PM

The head of India’s central bank has resigned amid a growing split between the Indian government and the independent monetary policy authority.

Reserve Bank of India governor Urjit Patel said in a statement posted on the bank’s website that he was resigning for personal reasons.

The government of prime minister Narendra Modi has disagreed with some of the central bank’s decisions under Mr Patel, including a move to restrict lending by debt-ridden banks.

Commonwealth Heads of Government Meeting
India’s prime minister Narendra Modi (Victoria Jones/PA)

Government officials said the central bank had excess reserves that should be transferred to the treasury.

Mr Modi’s government issued a sweeping demonetisation order in 2017 to try to reduce black-market dealings.

But a central bank report in August showed that most of the currency banned by the order had been deposited into various banks, undermining that move.