“That’s it!”

That is probably what Urjit Patel would have said and sent off his resignation today, shocking one and all.

If the BJP Govt cannot get enough from celebrating the victory over extradition of Vijay Mallya from UK to India, they probably need to remember that Mallya was the very same symptom of the banking sector, which Patel was trying to cleanup.

Though Patel cited “personal reasons” no one believes it! Who resigns as a RBI Governor, that too at such a crucial juncture? Obviously, the BJP govt pushed him too hard and he decided to take the bold step of resigning; he could not have embarrassed the Govt more.

One cannot help but think back two years ago; when demonetization happened, we all were certain that Patel Was a “Modi man” and a mere rubber stamp. But over a period of time, we saw how he dug his heels in and did not allow to be pushed over. The ‘demon’ and then counting of the money for two years, the mounting NPAs; he probably had more than enough of his share of crisis. ‘Demon’ happened too early on in his career as Governor but over a period of time, he showed that he could hold his steed.

Naturally, this has not gone down well with either the capital markets or the money markets. This resignation is not good news as it puts the BJP is a very bad light. Interfering in the autonomy of an institution like RBI is blasphemous and they are doing precisely that. Putting ‘yes men’ in all such important institutions is a sign of fascism; is that where we are heading? Or are we already there?

The market will now watch who comes in as a RBI Governor? Which economist, at least someone who is an independent, will take up this job knowing fully well that he/she would need to kowtow with the ruling Govt? And if he/she ends up being a mere rubber stamp, this could be the biggest danger for India.

The protocol set for the RBI in such a situation is to get the oldest (in terms of tenure served) Deputy Governor to fill in as acting RBI Governor till such time that the Govt finds one. The Govt, in all likelihood will bring in an IAS and not an economist as a bureaucrat will be more malleable. For a govt, which is so concerned always about perceptions, especially amongst foreigners, the way in which it handles this situation will be very crucial.  

The BJP has to think beyond making headlines! Patel has made the biggest statement possible with his resignation, we all need to pay heed to that and understand how an institution like the RBI is being compromised.