A RBI Governor doesn’t have to ba a rockstar to be successful, Fitch Ratings said on Sunday, commenting on central bank deputy governor Urjit Patel’s appointment as the next chair.
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As per ET, the shortlist of names considered by the committee included the department of economic affairs secretary Shaktikanta Das, chief economic advisor Arvind Subramanian, former deputy governor Subir Gokarn, former World Bank chief economist Kaushik Basu and Dr Patel.
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.
Patel, who was made Deputy Governor in January 2013, will also be among the few RBI Governors to have had a corporate background as most of the occupants of the top post at Mint Street were either career bureaucrats or economists with academic institutions.
Fitch said Rajan has set in positive transformation starting with recognition of high inflation and weak bank balance sheets problems. “I think having a governor who knows the system and continues with some of the policies and can attend to the imperatives of the growth and the de-risking of the economy to me makes a very good choice and this is a very good decision by the Government of India”, he added.
In its reaction, Fitch Ratings said Patel’s appointment as the next RBI Governor signals a strong likelihood of policy continuity.
The government yesterday elevated Patel as the 24th Governor of the Reserve Bank.
Since Rajan announced in June that he won’t be available for a second term, there has been a lot of speculation on the next governor.
Dr Urjit R Patel is set to take up his new position as the 24chief of India’s central bank on 4 September and he has some big shoes to fill.
“First, efficient transmission of credible monetary policy fosters a stable macroeconomic environment with inflation at moderate levels”.
Arundhati Bhattacharya, chairman of State Bank of India, said, “Appointment of Urjit Patel comes as a welcome move. The clean-up of banks balance sheet has started and it would be credit positive from a sovereign perspective, if it led to improved bank capitalisation levels, renewed loan growth and robust risk processes”, Diron said.
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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. The statement added that inflation is expected to remain broadly stable around recent levels although there are sources of upside risks.
