MUMBAI: RBI Governor Dr Urjit Patel is an unusual economist.That he’s low-key and shuns publicity is evident from the fact that he delivered just four speeches as Governor, as against his predecessor Dr Raghuram Rajan’s unbeatable 17 in one year.
The London School of Economics, Oxford University and Yale-graduate is among the most powerful economists in the world, yet he’s remarkably uncommunicative for a modern, central bank regulator. He’s more opaque than any other central banker in the US or Europe, who use every public platform (blogs, seminars etc) to be heard.
We have little idea what Patel really thinks. The nation’s top-most market mover has unmatched influence over Indian monetary policy, but insiders say his single-minded goal is to help the main street, not Dalal Street. When he interacts with economists during the routine pre-policy reviews, Patel is all ears. “I was blunt putting across a point, but he (Patel) simply smiled and there was no other reaction,” recalled an economist who met the Governor just once.
His media briefings are timed military-style – the bi-monthly post-policy briefings rarely exceed 25 minutes. But, here too he manages to fade into the background, encouraging his deputies to respond. This is done either to convey that RBI has many capable leaders or is an attempt to change the RBI’s previous reliance on ‘personality’ communication, where the press relied almost entirely on one man (read Rajan) to get their read on the economy.
Since he took over last September, Patel has been praised less and criticised more, but not without reason. He has been in the middle of crisis after crisis -- be it the banking sector’s ballooning bad loans, the government’s out-of-turn move amending the RBI Regulation Act, which some say dilutes the central bank’s regulator role to that of an administrator, and its inability to revive corporate credit growth that fell to historic lows.
The credibility of the RBI was also questioned vociferously when the esteemed Monetary Policy Committee (MPC) appeared misguided in its inflation projections. The MPC was supposed to have divergent views, but the Committee’s unanimity in deciding not to tinker with policy rates initially seemed to have defeated the very purpose for which it was created. The North block was evidently upset, yet, the Governor refrained from any additional ‘commentary.’
Patel’s isn’t an isolated case for attracting criticism over policy rates. But nothing was as damning as the criticism he received during demonetisation, which dented his credibility in one stroke. Days after the government announced the unprecedented currency reform, conflicting reports emerged that the central bank was informed days before the implementation.
And, for not opposing the move, Patel was termed a henchman of the NDA government. What followed was chaos (circulars issued and rolled back), yet Patel maintained stoic silence. Some say the Governor exercised his role as an outright central banker sticking to regulation. “Central bankers don’t say more than required and don’t display emotion,” said another economist. But this annoyed several others for being less communicative during situations demanding assurances and explanations.
Having been handed power amidst hyperbole, one would imagine Patel enduring conflicting emotions -- including the need to be as good, or better, than the ‘rockstar’ image of Rajan. But, his working style proves that Patel isn’t after recognition and simply doesn’t care about the spotlight.
In the past one year, he spoke his mind only once on farm loan waivers, remotely indicating that this otherwise closed-off man may be thinking carefully about how history will judge him. The post-policy media interaction in April was a watershed moment that showed unaccustomed public introspection from Patel. As always his voice took on a nervous, shaky tinge when he read out the note on the impact of waivers. It was startling because it was most pointed, and Patel’s first-ever mild warning to the state governments.
Barring this, most of what is said about Patel is either spin or speculation. Months after he took over, fake news went viral that the 54-year-old was married to Nita Ambani’s sister, while he’s unmarried and stays with his mother. On the professional front, it was reported that the government met MPC members separately, perhaps to influence the rate cut decision, indicating utter disregard for the central bank’s autonomy. In reality, as Patel clarified later, no such interaction took place.
In line with the central bank’s tradition of obsessive secrecy, firm facts about the Kenya-born are rare. He keeps close to himself and there have been just one or two full-dress media appearances in his four years with the RBI (three years as Deputy Governor). Yet, insiders say he’s quietly changing everything about the regulator. By not trying to hog the limelight while doing his job, some say, Patel is doing what central bankers are supposed to.