Patel is now RBI’s deputy governor, responsible for the bank’s monetary policy and is one of the main architects of India’s inflation target and rate-setting panel.
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52-year-old Patel headed a committee on Monetary Policy Reforms that suggested a medium-term target on inflation and a glide-path to achieve the number.
He will start his three-year term on September 4.
But on a broader view, Mr Patel is seen as offering the closest feel to a second term by Raghuram Rajan, who unexpectedly announced in June he’s quitting as governor.
A former chief economist at the International Monetary Fund (IMF), Rajan was appointed RBI Governor by the previous UPA government.
The chief of the RBI is typically chosen by the prime minister in consultation with the Finance Ministry, making Dr Patel the first governor to be chosen by Prime Minister Narendra Modi. He has also run the central bank’s monetary policy department since 2013 and is considered as a leading contender for the governor’s job.
Sir CD Deshmukh was the first Indian to get an extension as RBI Governor. “Urjit Patel’s appointment as the next RBI governor signals a strong likelihood of policy continuity”, Rookmaaker wrote.
Urjit Patel was Responsible for RBI’s report on switching to retail inflation targeting.
“Being an architect of the new policy framework, he retains high credibility for monetary stability”. He was on deputation to the Reserve Bank from the International Monetary Fund between 1996 and 1997 after which he was a consultant (1998-2001) to the Department of Economic Affairs in the Finance Ministry.
A notification was issued by the government on August 6 on monetary policy.
Urjit Patel finally succeeds Raghuram Rajan’s controversial exit. “Further, RBI may continue to stress on the 4 per cent target”, said A Prasanna, an economist at ICICI Securities Primary Dealership.
Some of his previous assignments include as President (Business Development), Reliance Industries Limited, Executive Director and Member of the Management Committee, Infrastructure Development Finance Company Limited (IDFC) (1997-2006), Member of the Integrated Energy Policy Committee of the Government of India (2004-2006), and Member of the Board, Gujarat State Petroleum Corporation Limited.
The new governor takes over at a time when inflation has bust out of the top end of that range. Patel, who will be watched for handling of inflation, interest rates bad loan clean-up at banks and the upcoming NRI deposit redemptions, has an M. Phil degree from Oxford University.
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Co-operative sector has great hopes from the new governor as the outgoing Governor stressed upon the need to streamline cooperative banks but could not do anything concrete for the sector.
