Former RBI governor Urjit Patel appointed ED at International Monetary Fund
Urjit Patel is back to playing a key role for the Narendra Modi government seven years after he quit RBI.
Former Reserve Bank of India (RBI) governor Urjit Patel has been appointed as India’s next executive director (ED) to the Washington-based International Monetary Fund (IMF) for a period of three years after the Appointments Committee of the Cabinet, headed by Prime Minister Narendra Modi, cleared his name on Thursday.
Patel is back to playing a key role for the Narendra Modi government seven years after he quit RBI.
“The Appointments Committee of the Cabinet has approved the appointment of Dr. Urjit Patel, Economist and Former RBI Governor, to the post of Executive Director (ED) at the International Monetary Fund, for a period of three years with effect from the date of assumption of charge of the post, or until further orders, whichever is earlier,” an official notification, dated August 28, said.
The position of the IMF ED was lying vacant since April 30 when after Krishnamurthy Subramanian was removed due to controversies surrounding his book, and alleged violations of IMF protocols. Currently, Patel is one of the eight non-executive directors of Britannia Industries.
“The executive board (the Board) is responsible for conducting the day-to-day business of the IMF. It is composed of 25 directors, who are elected by member countries or by groups of countries, and the managing director, who serves as its chairman. The Board usually meets several times each week. It carries out its work largely on the basis of papers prepared by IMF management and staff,” the IMF portal states.
Patel took over as the RBI governor on September 4, 2016, after Raghuram Rajan had to step down from the top post at India’s central bank amid tussles with the government. But Patel, too, couldn’t complete his tenure and had to resign on December 10, 2018, months after the government introduced electoral bonds on January 2, 2018, amid rapidly deteriorating relations with the finance ministry.
Functionaries, however, pointed out that PM Modi praised Patel in a rare tweet after the latter left. “Dr. Urjit Patel is a thorough professional with impeccable integrity. He has been in the Reserve Bank of India for about 6 years as Deputy Governor and Governor. He leaves behind a great legacy. We will miss him immensely,” Modi tweeted at 5.56pm on December 10.
In an interview with news agency ANI, Modi also rejected speculations about Patel’s exit and insisted that he left for personal reasons. A retired official aware of the details pointed out that Modi and Patel had old ties, “which suffered tremendous strains but Patel’s appointment to IMF proves that it was never ruptured”.
Appearing before the standing committee of finance on June 12, 2018, Patel had sought more powers from the government to control the functioning of public sector banks in the backdrop of the ₹14,500 crore fraud at the state-run Punjab National Bank (PNB).
In a written reply to the Parliamentary panel, the RBI said it wants Section 51 of the Banking Regulation Act to be amended, noting that the law made in 1949 “does not apply to the public sector banks in full.”
“This forms a great constraint for a regulator and supervisor,” the banking regulator said.
Patel, however, had defended the government’s decision to demonetise ₹500 and ₹1,000 bank notes in 2016. Amid speculations that the RBI was kept in dark about this decision, Patel told a parliamentary panel that he was “consulted” during the demonetisation process.
