Former RBS India chairman dubs Rajan's decision as 'extremely harmful' for economy

Former CEO and chairman of the Royal Bank of Scotland in India, Meera Sanyal, on Saturday dubbed Reserve Bank of India (RBI) Governor Raghuram Rajan's decision to not continue with his current post after the end of his tenure in September as 'extremely harmful' for the economy, adding that Rajan needed to be at the helm of affairs as uncertain times loomed ahead in the global economy.

"This is going to extremely harmful for the Indian economy. We are entering a period of instability, with Britain's exit vote set for next week and oil prices instability. There is a period of uncertainty ahead for the global economy and the Indian economy. And at such times, Raghuram Rajan not being in the position, would be quite harmful for us," Sanyal told ANI.

Sanyal, who is also an AAP leader, launched a veiled attack on BJP leader Subramanian Swamy, who had earlier called for Rajan's removal from the top post, saying that it was more a personal campaign against the RBI Governor.

"It's clear that there has been a sustained campaign by Subramanian Swamy that Rajan should not continue. People were speculating that this was a personal campaign. This is unfortunate," she added.

Earlier today, Rajan announced that he would return to the academic world at the end of his term on September 4, 2016, adding he will always be available to serve his country when needed and asserted that his 'successor' would take the nation to new heights.

Rajan is currently on leave from the Chicago Booth School of Business where he holds the post of Distinguished Service Professor of Finance.

"The approaching end of my three-year term and of my leave at the University of Chicago was, therefore, a good time to reflect on how much we had accomplished. I am confident my successor will take us to new heights with your help. I will still be working with you for the next couple of months, but let me thank all of you in the RBI family in advance for your dedicated work and unflinching support. It has been a fantastic journey together!" the statement said.

Bharatiya Janata Party (BJP) leader Subramanian Swamy had last month triggered speculation by asking the Centre to deny Rajan a second term, saying his hawkish policies have ruined the Indian economy.

Swamy on Saturday welcomed the latter decision to leave his post as the Reserve Bank of India (RBI) Governor on the completion of his term this year, saying he was not even getting a second term in the first place.

Swamy told ANI that Rajan made this decision in order to save his self respect.