Reserve Bank of India Governor Urjit Patel resigned for "personal reasons" on Monday, a decision analysts linked to intense government pressure on the bank to ease regulatory curbs.
The government and the RBI have been fighting for weeks over how much autonomy the central bank should have as the administration of Prime Minister Narendra Modi seeks to reduce curbs on lending and to gain access to the RBI's surplus reserves.
Here's what policymakers and analysts said on his surprise exit from the top central bank position:
Prime Minister Narendra Modi
"Dr Urjit Patel is a thorough professional with impeccable integrity. He has been in the Reserve Bank of India for about 6 years as Deputy Governor and Governor. He leaves behind a great legacy. We will miss him immensely."
"Dr Urjit Patel is an economist of a very high calibre with a deep and insightful understanding of macro-economic issues. He steered the banking system from chaos to order and ensured discipline. Under his leadership, the RBI brought financial stability."
Finance Minister Arun Jaitley
"The Government acknowledges with deep sense of appreciation the services rendered by Dr Urjit Patel to this country both in his capacity as the Governor and the Deputy Governor of The RBI. It was a pleasure for me to deal with him and benefit from his scholarship."
"I wish Dr Patel all the very best and many more years of public service."
S Gurumurthy, RBI board member
"Surprised at the news that RBI governor has resigned. The previous meeting was held in such cordial atmosphere that it comes as a shock. All directors said media had created a wrong perception while inside it was totally different. That makes it even more surprising."
"I enjoyed several hours of personal discussions with him where we found large areas of agreement as well as mutually understandable disagreement. His resignation is indeed a set back to the effects of the convergence of views that was taking place. We will miss him."
Nirmal Jain, chairman, IIFL Group
"More important than post mortem is to watch who succeeds. It's very important at this stage that the government quickly finds a replacement with impeccable and high credentials to ensure continuity and stability."
Sachin Chaturvedi, RBI board member
"Urjit Patel should not have resigned at a time when most of the controversial issues have been discussed and decided ... we look forward to meeting on December 14 to discuss the pending issues. Meeting could be chaired by RBI senior most deputy governor."
Rushabh Maru, research analyst, Anand Rathi Shares and Stock Brokers
"RBI governor's resignation is going to spook the market. After the last month successful RBI board meeting, market expected that all is well between the RBI and government. The timing of the resignation is definitely going to weigh on the market sentiment which is already weak because of domestic and global factors."
Viktor Szabo, Aberdeen Standard Investments
"We had this row between the government and the central bank over independence, we thought it had faded but it seems not."
"Perhaps it plays into the pre-election campaign for next year, that is something that we will be watching really closely"
Garima Kapoor, economist and vice-president, Elara Capital
"This is a huge credit negative for India - it's an image issue for the country, and FIIs are not going to take it very positively."
"Foreign investors are likely to take this extremely negatively because this affects the credibility of the central bank, which is highly important for the stability of the economy."
R Sivakumar, head of fixed income, Axis Mutual Fund
"I think typically when central bank governors or leaders anywhere in the world quit, that potentially can have significant effect on the currency and bond markets. I think it's something that we'll be watchful for tomorrow. I think tomorrow and over the next few days we can expect heightened volatility in the markets."
"For tomorrow, markets certainly will be concerned unless there is further clarifications that come through tonight. Otherwise it is likely that there will be some amount of volatility."
AK Prabhakar, head of research at IDBI Capital
"It will have a negative impact on the market. However, it's very difficult to say at this point of time, how much impact it would have, although it's sending a wrong signal."
A Prasanna, head of research, ICICI Securities Primary Dealership
"The news is definitely a big surprise. The timing just before this week's board meeting suggests that there's still a huge gap between government and RBI positions on key issues. Markets will now hope that the government has a plan of action ready so as to restore calm."
Lakshmi Iyer, chief investment officer, fixed income, Kotak Mahindra AMC
"Markets were not prepared for this. Tomorrow is also the political uncertainty day. So, if that saves then you'll see some saving grace. Otherwise, I don't think markets may take this very kindly, especially dollar-rupee."
"I was not expecting this. From a markets standpoint, it might rebound, that's a different thing, but for a knee-jerk reaction, I think it'll be negative for dollar-rupee and, therefore, logically for bonds also. We'll have to wait and watch."
VK Vijayakumar, chief investment strategist at Geojit Financial Service
"The resignation of the RBI Governor is a short-term sentimental negative. But this is not likely to impact the economy and the market beyond the very short term, provided we get a good reputed person as a replacement."
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