RBI Governor Urjit Patel calls on Arun Jaitley

Following the meeting, Patel told reporters here that the RBI’s next monetary policy review is due on October 4 “when we will talk”.

It was the first time Urjit Patel met Arun Jaitley after becoming RBI Governor. Both were widely credited for other signature reforms, including a target for consumer inflation.

A private handover ceremony from Rajan will take place on Tuesday. The outgoing central bank head Raghuram Rajan, whose stint ended on September 4, was the last RBI governor to take an independent decision on the rate cut policy.

“(He) seems well-positioned to further institutionalize these policy changes in the period ahead.

The deputy governor in charge of the monetary policy department is also expected to be nominated to the new Monetary Policy Committee (MPC).

Among his assignments as deputy governor, Patel chaired the Expert Committee to Revise and Strengthen the Monetary Policy Framework. But economists say Patel could have room to cut rates further if above-average monsoon rains temper food prices. Vegetable prices could retreat from a high base a year ago.

The economy could use some stimulus given growth slowed to a 15-month low of 7.1 percent in April-June, well below the 8 percent needed to create millions of new jobs.

He has several publications in areas of Indian macroeconomics, monetary policy, public finance, financial sector, worldwide trade, and regulatory economics, the RBI said.

Patel will thus need banks to cut lending rates further, a relationship that will likely occupy much of his term.

During his three-year term as the RBI Governor, Rajan repeatedly refused to lower the interest rates, and also ended his term holding up a caution against the move.

In contrast, Patel officially assumed charge with effect from September 4 – a Sunday – itself, which was made public by RBI through a statement a day later.

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Some commentators have already said that Patel “quietly” assuming office could be a signal for the things to come at RBI, after the end of tenure for an outspoken Rajan at the helms, who was always vocal with his views on all issues – economic, social and political – and always pitched for greater communication on part of the central bank.