Urjit Patel: An RBI governor who doesn’t talk but acts
RBI governor Urjit Patel’s wont to keep a low profile will keep the government happy but his actions may not, always.Updated: Sep 04, 2017 10:49 IST
Raghuram Rajan had taken over as governor of the central bank in the world’s fastest-growing major economy in the thick of the taper tantrum in September 2013 when the local currency was depreciating every day against the dollar and inflation was in double digits. His predecessor D Subbarao had witnessed the collapse of iconic US investment bank Lehman Brothers a few days after he had taken over, leading to the transatlantic financial crisis.
In contrast, Urjit Patel, the Reserve Bank of India’s (RBI’s) 24th governor who completes first year in office on Monday, took over the mantle when both the macroeconomic scenario in India and the external environment were relatively benign. However, he faced his litmus test two months down the line when Prime Minister Narendra Modi announced a radical plan to purge the financial system of black money.
Modi announced this in a nationwide televised address on November 8 night after a hurriedly convened board meeting of the central bank in Delhi, the minutes of which have not been made public as yet. In the 50 days between November 10 and December 30, 2016, Rs 15.44 trillion worth of currency notes of Rs 1,000 and Rs 500 denominations — some 86.9% of the value of total notes in circulation — were withdrawn to attack black money hoarders, fake currency and terror funding in the country.
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