Lauding governor Urjit Patel for staunchly defending the autonomy of the central bank, industry doyen Rahul Bajaj on Thursday said government should not force its decisions on the Reserve Bank by invoking the never-used Section 7.
He hoped that at the forthcoming board meet of the central board of the RBI on November 19, the regulator and government will reconcile by ceding some space, but made it clear that if Section 7 is invoked, Patel has no other option but to resign.
“If government wants to stick (to its guns), then the matter will heat up. If RBI or Urijit Patel also sticks (to his own stand), and if government invokes Section 7, then it means, according to me, Patel has to resign,” he told reporters.
“Why did Section 7 come up if you two agree? If they are not listening to you, then you (Patel) should go. I am not against Patel at all,” he said while speaking on the sidelines of the annual Jamnalal Bajaj Awards instituted by the group to recognise the work of individuals in diverse social and cultural fronts.
As part of the reconciliation process, each side will have to cede a bit, he said, adding RBI should make concessions on two of the most contentious issues by giving more money to small businesses and liberalising the prompt corrective action framework on 11 state-run banks.
Wading into the debate started by Finance Minister Arun Jaitley, Bajaj said the elected Parliament is “supreme” and therefore, there is a talk of invoking Section 7, which has never been used in the RBI’s over 83-year-old history.
“I very much hope the independence of RBI will be retained, and Section 7 will not be resorted to,” he said, adding there cannot be 100 per cent agreement at the board on certain aspects.