Law Minister Ashwani Kumar, also caught in controversy, has also resigned.
News that Mr Bansal had been forced to resign came soon after Congress president Sonia Gandhi met the Prime Minister this evening. The Railway Minister is meeting the Prime Minister at the latter's & Race Course Road residence. Earlier, hectic meetings were held at the PM's residence suggesting a larger churn in the party. Senior minister Ghulam Nabi Azad was there as was Ahmed Patel, political advisor to Mrs Gandhi; another minister Sachin Pilot too met Dr Manmohan Singh. (Live updates)
Mr Bansal, who only took over in October last year, was under tremendous pressure to quit after his nephew Vijay Singla was arrested last week for allegedly accepting bribe to organise a plum posting for a senior official in the Railways, which his uncle heads. The CBI is expected to interrogate Mr Bansal to follow up on allegations of his involvement in the case as new details are emerging in its investigations. (Read)
The BJP, which forced an early end to the Parliament's Budget session this week over its demand that the two ministers resign, has said, "Pawan Bansal resigned under pressure... now what about Ashwani Kumar?" The main opposition party has also sought the PM's resignation. (Bansal resigns: who said what)
Ashwani Kumar is in the dock for having vetted a CBI report on its coal block investigations meant for the Supreme Court. The court has severely reprimanded both the CBI and the government for Mr Kumar's actions. But Mr Kumar continues to insist that he has done no wrong.
Congress president Sonia Gandhi has reportedly not been in favour of either of the two ministers tainted by scandal continuing in the government, but the Prime Minister has reportedly been reluctant to sack Mr Kumar. Government sources said a distinction is being made between Mr Bansal's alleged act of financial impropriety and the actions of Mr Kumar, who is not charged with acting for personal gain.
Mr Kumar is seen as personally close to Dr Singh. In fact, both Mr Kumar and Mr Bansal, as Punjab politicians, are seen as the PM's men.