RBI Governor Shaktikanta Das is a man of firm views. Prior to becoming Governor, he voiced opinions on several aspects related to fiscal and monetary policy, but it’s unclear how much his personal views will influence RBI decisions.
While Das continues to be active on social media platform Twitter, even talking about the nature of his meetings at RBI — defying central banking convention — only time will tell if he will continue to be dovish on monetary policy, or stick his neck out on consolidating PSBs, come hell or high water.
Interestingly, just weeks ahead of RBI’s inconclusive October board meeting, Das appeared clear about the extent of capital RBI should hold. “... RBI’s reserves are still around $400 billion. Focus should continue on steadying the banking sector,” he said in a Tweet.
In the same breath offering unsolicited advice to the government, he said focus should be on debt and deficit targets as India’s macro numbers were its biggest insurance against global uncertainties. In the past, he also stressed the need for correcting the debt-to-GDP ratio and improving the quality of public expenditure.
Earlier this year, Das also noted that government should have a holding company for PSBs. “There are around 21 such banks. I feel that around ten should be retained as it is, and the rest should be merged or taken over. The creation of a holding company will allow shares of these PSBs to be transferred,” he said, adding that these holding companies should be allowed to raise funds from capital markets, so that the government does not need to recapitalise these banks.
