Career civil servant to head India’s central bank

12, Dec. 2018

By Atul Ranjan

NEW DELHI, NNA – The Indian government on Tuesday appointed Shaktikanta Das, a 61-year-old former bureaucrat, as the 25th governor of the Reserve Bank of India (RBI).

The appointment followed the announcement Monday that Urjit Patel, a 55-year-old economist, had resigned from the RBI’s top post, amid a conflict with the government over the central bank’s independence from political influence.

Das will serve a full three-year term. Patel’s tenure was due to end in September 2019.

Das held various government positions. He was Economic Affairs Secretary from 2015 to 2017.

While praising the government’s move to quickly appoint a successor to Patel, analysts said the choice could have been better.

“The quickness of the government is a good thing, but...it shows that there weren't many serious economists going around, who wanted the RBI governor's job,” Vivek Kaul, an independent economic analyst, told NNA.

“A bureaucrat, rather than a monetary expert, is replacing Urjit Patel …it would impact sentiment,” said an academic expert, on condition of anonymity. But he noted that many bureaucrats in the past have successfully served as RBI Governor.

Patel worked for the International Monetary Fund before joining the RBI.

The RBI and the government were at loggerheads over capital adequacy standards for lenders and an exit route for banks under the “prompt corrective action framework” for monitoring bank’s financial health.

Press reports said the government was urging the RBI to allow ailing state-owned banks to resume lending to small businesses and cut interest rates to spur economic growth.