Brokerages believe that the RBI Governor Urjit Patel’s resignation will be sentimentally negative for markets. Urjit Patel’s resignation from the Governorship of the RBI comes nine months before his term ends. Here’s what brokerages are saying on his resignation:
CLSA said the RBI Governor’s resignation is a sentiment-negative for markets and could impact flows into debt and equity markets. The RBI may intervene in the currency or G-sec market to manage volatility. While decisions at the RBI are institutionalised and past decisions may not change, the market will speculate over PCA norms, shareholding/the CEO role of promoters in private banks and holding company structures, said CLSA. The direction of monetary policy actions will also be relevant, it said. The government has been seeking the relaxation of PCA norms for PSU banks, which if relaxed, would be positive for those banks, said CLSA.