In a huge embarrassment for Prime Minister Narendra Modi government and finance Minister Arun Jaitley , Urjit Patel , RBI Governor has resigned citing personal reasons.

The resignation comes after tensions between the RBI and the government mushroomed after RBI Deputy Governor Viral Acharya said last month that undermining the central bank’s independence could be “potentially catastrophic”, indicating the authority was pushing back against government pressure to relax its policies and reduce its powers ahead of a general election due by May.

The government had also invoked never-before-used powers to issue directions to the central bank governor on matters of public interest.

In a statement Patel said :

“On account of personal reasons, I have decided to step down from my current position effective immediately. It has been my privilege and honour to serve in the Reserve Bank of India in various capacities over the years. The support and hard work of RBI staff, officers and management has been the proximate driver of the Banks considerable accomplishments in recent years. I take this opportunity to express gratitude to my colleagues and Directors of the RBI Central Board, and wish them all the best for the future.

Urjit R. Patel

10th December 2018”