About Shaktikanta Das: New Governor of RBI

The government Tuesday appointed Shaktikanta Das, former Economic Affairs Secretary, as Governor of the Reserve Bank of India (RBI) for a period of three years. The new Reserve Bank of India (RBI) Governor Shaktikanta Das said today that he will uphold values and autonomy of the central bank.

New RBI Governor
New RBI Governor

About Shaktikanta Das

Shaktikanta Das is a 1980 batch IAS officer of Tamil Nadu Cadre and a very prominent bureaucrat who served under both NDA and UPA governments.
He served as economic affairs secretary from 2015 to 2017; and was key official in both big economic moves of the government viz. demonetisation and implementation of GST.
Appointment committee of cabinet approved Shaktikanta Das appointment as RBI governor. He will serve as governor for the term of three years.

Background

After the resignation of Urijit patel, Shaktikanta Das has been appointed as 25th governor of RBI. Urijit Patel resigned due to personal reasons. His tenure as RBI governor was about to complete in September 2019. Patel has become fourth RBI to step down before end of term. Before him, Sir Osborne Smith, Benegal Rama Rau and S Jagannathan had resigned before completion of their respective tenures. Das, 63, a veteran Tamil Nadu cadre officer, will first have to work on normalising the relationship between the central bank and the government that had turned frosty in the past few months as the two differed on many issues.

Das had been instrumental in establishing the monetary policy committee (MPC) and the switchover to an inflationtargeting regime, among other things. Now that he’s moving to the regulatory side, Das may even have to resist some of the ideas he supported when in government.

Das will begin consultations with all stakeholders, starting Thursday when he would meet public sector bank chiefs, he said. The RBI governor’s first meeting gives an inclination of his priorities, and it will be interesting to see where he stands on the prompt corrective action (PCA) framework, which was a major bone of contention between the government and the previous governor.

Bond yields dropped 10 basis points on Wednesday on hopes that Das would turn monetary policy accommodative, helping the government fire up growth ahead of the general election in 2019. He made appropriate noises on growth but dodged questions on where interest rates are headed, understandably because it falls under the six-member monetary policy committee. The bond market also thinks Das would be more tolerant on the centre’s fiscal slippages and give adequate liquidity.

On maintaining the RBI’s autonomy, Das said, “I will ensure that it is intact. The RBI is a great institution… has a long and rich legacy.” He was speaking to reporters after taking over as the 25th Governor.