Rajan's deputy Urjit Patel to be new RBI Governor

Patel’s appointment ensures continuity with change; indicates belief that he will synergise with the government.

Published: 21st August 2016 03:49 AM  |   Last Updated: 21st August 2016 03:50 AM   |  A+A-

NEW DELHI: Ending months of speculation, the government on Saturday appointed Urjit R Patel as the governor of the Reserve Bank of India. Patel is currently one of the four deputy governors at the central bank.

According to sources, more than one factor worked in favour of Patel's appointment. One, he was part of outgoing governor, Raghuram Rajan's team and can ensure continuity. And two, belief in his capability to work with the government. Also, Patel is expected not to be as ‘outspoken’ as Rajan, a trait that soured relations between him and the government. “Many in the government feel it is important to align the monetary and fiscal policies for a sustained economic growth,” said a source. “Patel being an insider, perhaps knows how best to work with the government, be it on interest rates or NPAs.” Rajan and the government were not on the same page on cutting the key rates and on the benchmark for declaring non-performing assets.

Rajan.jpgPatel was also part of many landmark decisions, especially on monetary policy. It was a committee headed by Patel that suggested major reforms to the monetary policy. The creation of a panel to set interest rates and a shift to inflation-targeting approach were the major decisions made by the committee. Seen as a close confidante of Rajan, Patel will now get to implement the policies he helped shape. Experts believe his first priority would be to bring down inflation and keep prices under check. Under the new framework of the monetary policy, Patel will be the first governor to oversee interest rate decisions. The RBI and the government have set a retail inflation target of 4 per cent for the next five years.

“Patel has been at the helm of institutionalising inflation targeting regime. His appointment signals continuity of policy intent,” said SBI chairperson Arundhati Bhattacharya, who herself was a candidate for the top post. Patel has a massive job ahead of him. Besides taming inflation, he will have to continue the efforts initiated to clean up bad loans. This will be the key to supporting further investments and sustaining India's economic growth.

Stay up to date on all the latest Nation news with The New Indian Express App. Download now


Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on are those of the comment writers alone. They do not represent the views or opinions of or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp