11/12/2018 8:12 AM IST | Updated 11/12/2018 8:13 AM IST

Urjit Patel: RSS Had Said RBI Governor Should 'Work With Govt Or Resign'

The chief of RSS' economic wing Ashwani Mahajan said in October that RBI officials should exercise restraint.

Swadeshi Jagran Manch
RSS Economic Wing's chief Ashwani Mahajan.

In an exclusive interview to Reuters, Ashwani Mahajan, who heads the Rashtriya Swayamsevak Sangh's (RSS) economic group Swadeshi Jagran Manch (SJM), had advised Reserve Bank of India officials to 'exercise restraint'. Mahajan had also said that if the governor 'doesn't follow discipline it would be better for him to resign'. The interview was published on 31 October this year and links to Mahajan's comments are displayed prominently in a section called 'Focus' on SJM's website.

RBI governor Urjit Patelresigned on Monday, citing 'personal reasons' amid growing speculations about differences with Narendra Modi's government.

Mahajan had also said that Patel should "restrain his officials from making differences public".

The RSS leader's comments came after RBI deputy governor Viral Acharya had said that the government interfering with the RBI's lending policies could be 'potentially catastrophic'.

In an excerpt from an interview quoted on the SJM website, Mahajan said, "The fact is that the RBI is not accountable to the people of this country, the government is. Therefore, the government has to do many things for their welfare... it sends suggestions to the RBI..." The excerpt also claimed that Mahajan had accused Acharya of defaming India internationally.

Acharya had said, "As many parts of the world today await greater government respect for central bank independence, independent central bankers will remain undeterred. Governments that do not respect central bank independence will sooner or later incur the wrath of financial markets, ignite economic fire, and come to rue the day they undermined an important regulatory institution; their wiser counterparts who invest in central bank independence will enjoy lower costs of borrowing, the love of international investors, and longer life spans."