Urjit Patel has been appointed as new Reserve Bank of India governor. He’ll hold the post for three years starting September 4 . Mr. Patel, a banker and economist, has served on various government panels and as an advisor in the finance ministry. A committee headed by Patel recommended retail inflation targeting and a monetary policy committee.
- He will replace Raghuram Rajan, a former International Monetary Fund chief economist who stunned financial markets in June by announcing he would step down in September and return to academia after a single three-year term at the RBI.
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The new governor takes over at a time when inflation has bust out of the top end of that range. Consumer inflation accelerated to 6.07 percent in July, the fourth consecutive month it has stayed above the RBI’s near-term target of 5 percent by March.
- The government is soon expected to announce the composition of a six-member monetary policy committee to decide on interest rates. It will be made up of himself and two other RBI officials, along with three members appointed by the government.
- The selection of Patel as the 24th governor of the Reserve Bank of India (RBI) should come as no surprise considering that the monetary policy framework, based on which the central bank would function, is based on recommendations of a committee headed by Patel.
- “The appointment of Urjit Patel as the RBI governor, along with recent reconfirmation of 4 per cent CPI inflation target, suggests that a change in political economy and thus policy loosening may not be obviously imminent.
- The 52-year-old mr. patel was named a deputy governor of the central bank in January 2013 by the UPA government. In January 2014, he headed the committee that suggested that the Reserve Bank should target consumer price index (CPI), and not wholesale price index (WPI) as the policy peg.
- Patel, born on October 28, 1963, received his bachelors degree in economics from the London School of Economics, M Phil from Oxford and doctorate in economics from Yale University.
- He has worked with the International Monetary Fund (IMF) between 1990 and 1995 covering the US, India, Bahamas and Myanmar desks. He was on deputation (1996-1997) from the IMF to the RBI and provided advice on development of the debt market, banking sector reforms, pension fund reforms, real exchange rate targeting and evolution of the foreign exchange market.
