From being considered government's man on the Mint Street, outgoing RBI governor Urjit Patel had in less than two-years emerged from the shadows to find his own voice on issues that mattered the most -- autonomy and independence of the central bank.
From facing flak for allegedly toeing the government line on the shock decision to overnight junk 86 per cent of the currency in circulation, he overcame all that as he followed the "wisdom of an owl" in clamping down on loan defaults and cleaning up bank balance sheets.
Succeeding an outspoken governor with a 'rockstar' appeal, Patel was often considered reticent, rigid, uncommunicative and someone who appeared reluctant to meet and consult not just finance ministry officials but his own colleagues in the bank.
But the 55-year-old Patel, who on Monday announced his decision to step down nearly nine months before his three-year term was to come to an end, meticulously conducted the "deep surgery" initiated by his predecessor Raghuram Rajan to clamp down on loan defaulters, while seeking to safeguard the Indian banking system from any collateral damage.
Patel, who is the first Governor to resign since 1990s, cited personal reasons for the resignation but industry watchers say there were undercurrent since the government cited hereto never-used provisions of the law to bring him to the negotiating table on issues it felt were of national interest.
The friction between the RBI and the finance ministry was attributed to the recalcitrance of Patel, who appeared keen to be seen as a defiant, independent-minded governor of high credibility by resisting the government's call for increased transparency on the central bank's reserves (just how much is necessary for stability operations) and for enhanced liquidity so that credit can be eased to money-strapped sectors especially MSMEs.
Hailing from a business family based in Nairobi, Patel, who studied at London School of Economics, Oxford and Yale University, was a Kenyan national until 2013. He acquired an Indian citizenship before he was appointed deputy governor of RBI in January 2013.
While he maintained central bank's independence in handling bad loan cases, RBI drew criticism for taking an awfully long time to disclose the final number of junked currency notes that came back to the system -- something which suited the government.
But genesis of his resignation may have been in the recent escalation of tensions between the RBI and the government after the finance ministry initiated discussion under the never used Section 7 of the Reserve Bank of India Act, 1934, which empowers the government to issue directions to the RBI governor.
RBI deputy governor Viral Acharya had in a speech in October talked about the independence of the central bank, arguing that any compromise could be "potentially catastrophic" for the economy.
The issues that brought them head on included appropriate size of reserves the central bank must maintain, easing of lending norms to ease liquidity rules certain sectors and guidelines for weak banks.
Within a month of Patel taking over the top job at the RBI, the monetary policy committee (MPC) framework was introduced to collectively decide on interest rates and has been generally successful in achieving its primary objective of keeping inflation under a pre-stated target.
Another important direction from the RBI early in Patel's tenure has been with regard to credit information companies that provide access to individuals about their credit history. Also, the apex bank worked on new guidelines for tackling cyber-security concerns and pre-emptive cautionary warnings and directions on evolving challenges posed by cryptocurrencies.
Besides, the RBI also set up a new enforcement department as part of a broader plan to develop a rule-based approach to deal with breaches of law, rules and directions and to make the enforcement process stringent and consistent.
As the financial health of banks had deteriorated over the last few years, the RBI has revised norms for prompt corrective action and promptly imposed them on some public sector lenders. The new framework encourages banks to eschew certain riskier activities and focus on conserving capital so that their balance sheets can become stronger.
While industry estimates peg overall NPAs at over Rs 10 lakh crore, the RBI has said the stressed assets (gross NPAs plus restructured standard advances) remained elevated at 12.1 per cent of gross advances at end-March 2018.
The RBI has also introduced measures to make banking easier for public, including for senior citizens and differently abled persons.
It has launched an aggressive awareness campaign on banking regulations and against frauds, and introduced a structured communication channel called 'Mint Street Memo'. It got global praise for its communication activities from the Bank for International Settlements.