Urjit R Patel who takes over as the Reserve Bank of India governor on September 4 is the first central banker to be picked through a search process, which also reiterates government’s commitment to RBI’s autonomy.
The government chose the 52-year-old deputy governor of RBI as Raghuram Rajan’s successor from a list of at least four names sent by the financial sector regulatory appointment search committee (FSRASC), sources said.
Prime Minister Narendra Modi in consultation with finance minister Arun Jaitley decided on Patel, signalling the government’s intent to continue with the reforms initiated by Rajan.
Rajan’s bomb-shell decision to not seek a second term took everyone by surprise and there was immense interests in who would take over from the “rock-star” banker.
Read | Govt eyes continuity, Rajan’s deputy Urjit Patel named next RBI governor
Headed by cabinet secretary PK Sinha, FSRASC was set up last year and it drew up an extensive list of candidates after a thorough scrutiny of their work. The final list was sent to the government more than a month ago.
“While the government took the final call on the governor, the committee provided that list, so the process has been much fairer and it is a shift from selection-based approach,” said Rajiv Kumar, senior fellow, Centre for Policy Research. He is one of the three external FSRASC experts.
{{/usCountry}}“While the government took the final call on the governor, the committee provided that list, so the process has been much fairer and it is a shift from selection-based approach,” said Rajiv Kumar, senior fellow, Centre for Policy Research. He is one of the three external FSRASC experts.
{{/usCountry}}An official statement said the appointment was made on the basis of FSRASC’s recommendations. “The committee undertook an extensive exercise to suggest a panel of names to the ACC (appointment committee of cabinet),” it said.
The search system provides the government an opportunity to underscore its support for an independent process to maintain the autonomy of the central bank.
“It sends a strong message to the outside world that RBI will remain an autonomous body and that there will be no compromise in the selection process, the best person will get the job,” said an official, who did not wish to be identified.
Patel, an able deputy of Rajan, has authored the monetary-policy framework that aims to contain inflation. He headed a committee that in 2014 recommended targeting retail inflation to tame unstable prices, shifting the focus away from wholesale prices.