Former Reserve Bank of India Governor Raghuram Rajan stepped down from his post when his first term came to an end because he was opposed to demonetization, former Finance Minister P Chidambaram said on Friday.
The former finance minister was speaking at the launch of his book - Fearless in Opposition, Power and Accountability.
According to Chidambaram, the day Rajan stepped down as the governor of the central bank, a five page letter opposing demonetization was submitted to the Centre. He dared the government to make the letter public.
"If the government is transparent, it should make that note (letter) public. The note was written on behalf of RBI. It was about demonetization arguing why it should not be implemented," Chidambaram was quoted in an IANS report as saying.
It added, quoting the former FM, "They (government) made it so difficult for Rajan to continue and, in retrospect it appears, one of the reason he was made to leave. They wanted to demonetize currency and Raghu was opposed it."
A PTI report quoted Chidambaram at the same event saying that Rajan was willing to continue as the RBI governor but "conditions were made for him to leave it."
Rajan stepped down from the post of the governor of the RBI on September 4 after his term came to an end. In the run up, he wrote an unusual open letter to his colleagues at the central bank, stating that after deliberations with the government, he had decided to step down and go back to academia.
"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 told the RBI.
The government delegalised the use of Rs 500 and Rs 1000 notes on November 8, 2016, in a bid to weed out black money and fake currency from the system. Rumours have been strife since then that the former RBI governor left the apex bank because he was against the demonetization decision. While Rajan has been replaced by Urjit Patel since, the former governor hasn't made any comments on the speculations and now, the former FM's statements.
Rajan is back in Chicago, and is now the Katherine Dusak Miller Distinguished Service Professor of Finance at the University of Chicago Booth School of Business.
