“It’s a continuation of Mr. Rajan’s regime”, said Madhavi Arora, economist at Kotak Mahindra Bank Ltd. There could be some addition, (in) some processes little bit changes.
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According to Kotak Mahindra Asset Management Company MD, Nilesh Shah, “Dr Patel’s appointment provides continuity to the monetary policy making especially related to inflation targeting. A central bank governor doesn’t need to have a rockstar status to be successful in reigning in inflation or cleaning up the banking sector”, Fitch Ratings said. They say Mr. Rajan’s lending-rate reductions, which took India’s benchmark to its lowest level in five years, haven’t been enough.
“It’s the best that has happened”.
The wish list that “Dr Patel”, as he is commonly referred to as, faces is long and could be hard to fulfil on many fronts – lower the rates, go easy on banks and borrowers, be liberal with grant of banking licences, safeguard foreign reserves and rather beef it up. Swamy, who controversially criticized outgoing RBI governor Raghuram Rajan’s alleged allegiance to the USA being a green card holder, tweeted on Sunday that Subramanian called Prime Minister Narendra Modi “a mediocre leader, efficient in riots” and “asked the United States to grill India in World Trade Organization for drub companies market access”.
He will be the eighth Deputy Governor to be made Governor at RBI.
Since Urjit Patel has been elevated as the next RBI Governor, the monetary policy department has to be looked after by any of the three deputy governors till the appointment of the fourth regular Deputy Governor.
Patel has also worked with the International Monetary Fund (IMF) and with think-tank, The Brookings Institution.
Urjit R Patelis an eminent economist, consultant and banker, now appointed as Governor of theReserve Bank of India.
While Rajan’s exit has been seen in many quarters as driven by his often candid views against various policies of the government, Patel’s appointment as the 24th RBI Governor may end up ensuring continuity of the monetary policy of the current Governor.
Ever since Rajan, in an unprecedented letter to his colleagues in June, said he was opting out of a second term at the helm of India’s central bank, speculation has been rife over who his successor would be – particularly given the outspoken nature of the incumbent and the eyebrows he raised. That could help overcome an expected initial negative reaction in bond markets on Monday, when the benchmark 10-year bond yield is expected to rise 2-3 basis points due to bets Patel will hold interest rates in the near-term. Besides, at least five former Governors had served at International Monetary Fund before becoming RBI chief, while a few others went on to work at International Monetary Fund after leaving the central bank. Under this new system, the RBI Governor is ex-officio Chairperson.
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Out of the six members of the MPC, three will be from the RBI – the governor, who will be the ex-officio chairman, a deputy governor and an executive director.
