Centre will have to consider legal aspects in appointment of new RBI guv: AN Jha

The central government will have to take stock of the current legal position in the fresh appointment of Reserve Bank of India (RBI) Governor, said Finance Secretary AN Jha on Tuesday.

His statement comes following the abrupt resignation of Urjit Patel as Governor yesterday, 10 months before the end of his tenure.

Whether the central bank will have a full-time or an interim Governor will be decided today, informed Jha.

Speculations about everything not being fine between Centre and RBI started pouring in after Centre had invoked Section 7 of the RBI Act, which allows it to issue directions to the central bank governor on matters of public interest.

On October 31, some media reports suggested Urjit Patel may consider resigning following an alleged rift with Union Finance Minister Arun Jaitley. Later, the Finance Ministry clarified that the government holds "extensive consultations with the RBI from time to time".

The Government in August 2016 had appointed Urjit Patel as the new Reserve Bank of India (RBI) Governor. He was India's 24th RBI Governor and was appointed for a term of three years starting September 4, 2016.

Patel, who cited "personal reasons" for quitting the prestigious post, is the first RBI Governor to resign since 1990.

He stepped down ahead of the scheduled meeting of the RBI Board on December 14 to consider proposals like RBI governance and providing liquidity for Non-Banking Financial Companies (NBFCs).