Govt's Appointment Of Ex RBI Governor Urjit Patel As IMF ED Comes As A Surprise To Many

The Appointments Committee of the Cabinet (ACC) on Thursday night approved Patel’s name for the post for a period of three years with effect from the date of assumption of charge of the post.

Patel will succeed K V Subramanian, who held the post from November 1 2022 until April 30. Subramanian's term was abruptly cut short by the government six months before his three-year term ended.  

“Patel has the required experience for this role and there couldn’t have been a better choice,” one of his former colleagues who had worked with him at the RBI told The Secretariat.

In January 2024, Patel who was then serving at the Asian Infrastructure Investment Bank (AIIB) as vice president for investment operations (Region 1) resigned from his position due to family health matters.

Why Curiosity Over Patel

In 2018 Patel had suddenly opted to resign amid a high pitch debate over erosion of RBI’s autonomy citing interference from the Centre. While Patel had cited personal reasons for his sudden departure from the central bank, his decision had raised eyebrows.

Patel served as the 24th Governor of the RBI between September 4 2016 and December 10 2018.

“I do think this is a serious issue, it needs to be dealt with carefully. The government has to ask what lead to this resignation. Resignations are not frequent at the RBI,” former RBI Governor Raghuram Rajan.

Patel first served as deputy governor at a time when Rajan was Governor of the central bank and later took over the top job after the latter completed his term.

After Patel tendered his resignation from the governor’s post Prime Minister Narendra Modi in a tweet said, “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.

Patel’s tenure as RBI Governor was marked with frequent tussles over the knotty issue of the quantum of central bank’s profit transfer to the government. Following Patel’s departure from the RBI, the government appointed Shaktikanta Das, now serving as Principal Secretary 2 to Modi. 

The executive board of the IMF is composed of 25 directors (executive directors or EDs) elected by the member countries or groups of countries.

Several other names have been doing the rounds for the post of the IMF ED. Patel was not considered for the post in the initial phase, an official said. “There were many contenders for the post but the decision was taken based on the requirements and who would be best suited for the role,” the official said. 

India’s IMF ED also represents neighbouring countries -- Bangladesh, Sri Lanka, and Bhutan.