Urijit Patel's unfinished job: He was piloting the bank system from chaos to order, his successor must take up the task

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Abstract:

It was with great sadness that I woke up to the news of resignation by RBI governor Urjit Patel this Monday morning.  Urjit has been a friend for more than two decades and I have greatly admired him for his brilliance, professionalism, integrity, conviction and friendship. With his departure, India has lost a committed public servant.

It is a rarity that a resignation, tendered amid policy differences with the government, elicits such a warm response from none other than the PM. In an unusual gesture, not only did Prime Minister Narendra Modi extol the governor for his thorough professionalism and integrity but also applauded him for steering “the banking system from chaos to order”.

Patel earned this high praise through sheer hard work and principled policy making. He inherited from his predecessor an extremely fragile banking system. Years 2008 to 2014 had seen an unfettered expansion of credit by public sector banks (PSBs), with the RBI failing to deliver on its key regulatory mandates.