RBI Governor Rajan Says No to Second Term, Congress Calls it India's Loss

RBI Governor Raghuram Rajan on Saturday said he will not serve a second term as head of the central bank, sparking a political war of words in which Congress accused the government of hounding him out.

Rajan told his colleagues at the Reserve Bank of India that he would be returning to academics after his three-year term ends on September 4.

"While I was open to seeing these developments through, 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. I will, of course, always be available to serve my country when needed," Rajan said in a statement.

Hours later, Finance Minister Arun Jaitley tweeted that the government appreciated Rajan's "good work" and respected his decision to step down.

"A decision on his successor would be announced shortly," he said.

'INDIA'S LOSS'

Former finance minister P Chidambaram, during whose tenure Rajan was made the RBI governor in 2013, launched a scathing attack on the government

I am disappointed and profoundly saddened by the decision of Dr Raghuram Rajan to leave the RBI on completion of his term on September 4, 2016, but I hasten to add that I am not surprised at all," Chidambaram said.

The former finance minister said the government had invited this development through a "craftily-planned campaign of insinuations, baseless allegations and puerile attacks" on the distinguished academic and economist.

"As I had said some time ago, this government did not deserve Dr Rajan. Nevertheless, India is the loser," he added.

BJP MP Subramanian Swamy, who has been carrying out a vicious attack on Rajan and has even accused him of destroying the economy, welcomed the decision.

"It (Rajan's decision) is good. The reasons I had given (against Rajan's continuance) were all valid. He has realised he would not get a second term. That's why he has made a statement himself," Swamy said.

BANKER WITH CELEBRITY STATUS

Rajan has a formidable reputation as an internationally renowned economist and is still being hailed across the world for accurately predicting the 2008 global meltdown.

No RBI Governor before him has enjoyed a celebrity status like he does. His views on the economy are taken very seriously in the West.

Rajan is credited with stabilising the volatile rupee and bringing down inflation. His style is unconventional and he is known to speak his mind

The Governor, however, said he is confident that his successor would take the RBI to new heights.