After a long wait of suspense and a lot of speculation by the media, the government of India on Saturday announced that Urjit Patel would be the new governor of Reserve Bank Of India (RBI) replacing Raghuram Rajan.
He is from Kenya and his grandfather migrated there.
Patel who is currently one of the four deputy governors of RBI had joined on January 7, 2013. He will be India’s 24th RBI Governor. The appointment has been made based on recommendations of the Financial Sector Regulatory Appointments Search Committee (FSRASC). He was till his appointment to RBI as deputy governor on the board of the Gujarat State Petroleum Corporation.
In 2014, Patel headed a committee that recommended that Reserve Bank of India (RBI) should follow an inflation-targeting approach, using consumer price inflation as the base, and a committee of the central bank and not the governor take the call on monetary policy.
A Ph.D. in economics from Yale University and an M.Phil from Oxford, Patel was an advisor to the Boston Consulting Group before his stint at the RBI. He served as the Chief Policy Officer at IDFC Limited from 1997-2006. He also served as a consultant to the Ministry of Power, Department of Economic Affairs, New Delhi from 1998 to 2001 and served at the International Monetary Fund and with a think-tank, The Brookings Institution. He has been the President (Business Development) of Reliance Industries in the past.
Many consider Patel to be a ‘hawk’ on his monetary policy stance and for keeping liquidity tight at a time when the RBI was lowering rates.
Patel has beaten former deputy governors Rakesh Mohan and Subir Gokarn and State Bank of India Chairman Arundhati Bhattacharya in the race to the Governor’s position. He will begin his three-year term on Sept. 4.
He has a major responsibility on his shoulder as he will be taking charge at a time when consumer inflation had accelerated to 6.07 per cent in July, whereas, it was targeted to bring down to 5 per cent by March. He will also have to put on efforts to clean up bad loans from the different banks of India.