RBI chief Raghuram Rajan took decision to quit as a “RBI Governor” . He increasingly felt he lacked support from his political bosses Finance Minister Arun Jaitley and Prime Minister Narendra Modi, his friends and colleagues said.
In one of the newspaper it was written that the selection panel would decide a field of candidates rather than directly offer the former IMF chief economist an extension to his three-year term, according to finance ministry source.
Raghuram Rajan was also upset as Jaitley had not backed him more strongly after criticism from Hindu nationalists of both his policies and his perceived lack of "Indian-ness", the sources said.
"He felt it would belittle the position of the RBI governor if he had to appear before the committee," said one senior commercial banker. It would reveal a lack of government support. Rather than have two more years of constant quibbling, he decided to go."
Rajan alleged in his letter that he had been free to see changes that he championed such as the creation of a monetary policy committee to set interest rates and a clean-up of the banking sector.
"On due reflection, and after consultation with the government, I want to share with you that I will be returning to academia when my term as governor ends on September 4, 2016,” he added.