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Tuesday, December 07, 2021

Steering economy during Covid gets Das 3 more yrs at RBI helm

The re-appointment of the RBI governor will be effective from December 10 or until further orders, whichever is earlier.

By: ENS Economic Bureau | New Delhi |
Updated: October 30, 2021 4:07:54 am
RBI governor tenure, Shaktikanta Das, Govt extends RBI Guv tenure, RBI, India news, Indian expressRBI Governor Shaktikanta Das. (File Photo)

The Union Government Friday extended the tenure of Reserve Bank of India Governor Shaktikanta Das for another three years till December 2024, thus giving him a tenure of six years. He had assumed charge on December 12, 2018, after his predecessor Urjit Patel had cited personal reasons and abruptly resigned.

The re-appointment will be effective December 10 or until further orders, whichever is earlier. “The Appointments Committee of the Cabinet has approved the reappointment of Shaktikanta Das as Reserve Bank of India Governor for a period of three years beyond December 10, 2021, or until further orders, whichever is earlier,” a statement from the Department of Personnel & Training, said.

After Bimal Jalan who left as the RBI Governor after a six-year tenure in September 2003, Das is the only Governor to get a six-year tenure. All others had a tenure of a maximum of up to five years in the last 60 years. “As he had worked in the Finance Ministry, he has maintained a good rapport with government officials unlike previous Governors who had differences of opinion with the government. He knows how the government functions and was non-confrontational,” said a former central bank official.

His immediate predecessor Patel had a tenure of just two years and three months and Raghuram Rajan’s term lasted three years.

Das, who was the face of demonetisation holding almost daily briefings in Delhi, successfully tackled the challenges posed by the Covid-19 pandemic as RBI Governor and announced a series of packages for all — the large industry, small units, individual borrowers, and others. The RBI, under him, pumped liquidity into the financial system to bolster growth and address stress in various sectors.

Das, who was Secretary, Department Economic Affairs, Ministry of Finance, before retirement, assumed charge as the 25th Governor of the Reserve Bank of India effective December 12, 2018. H is biggest challenges were to handle the pressure from the government on issues such as transfer of surplus funds to the government, restructuring of loans, infusing liquidity, and sticking to its strict default norms for resolution of bad debts in banks’ books, where the Centre has favoured a more lenient approach.

When the pandemic hit the country and the rest of the world, the RBI also announced a debt moratorium for six months and worked out a loan restructuring package for corporates when Covid hit the country in 2020.

Das successfully resolved the issue of transferring surplus amount to the Government as dividend soon after taking over as the Governor. His predecessor Patel had differed with the government on the issue of surplus amount. In August 2019, the RBI Board approved a transfer of Rs 1,76,051 crore to the government, including a surplus or dividend of Rs 1,23,414 crore, and a one-time transfer of excess provisions amounting to Rs 52,637 crore.

Das has been an advocate of accommodative monetary policy to bolster growth at a time when the economy faltered in 2020. The Monetary Policy Committee (MPC) of the RBI, headed by him, brought down the Repo rate to four per cent to push down interest rates in the banking system.

A 1980-batch Tamil Nadu cadre IAS officer, he was entrusted with the task of overseeing the re-monetisation of the economy after the shock decision to withdraw 86 per cent of the currency in circulation in November 2016. After his retirement, he was named India’s G-20 sherpa and appointed as a member of the 15th Finance Commission.

A history graduate from the prestigious St. Stephen’s College in Delhi, was brought to the Finance Ministry soon after the BJP-led NDA government came to power in mid-2014 and given charge of the crucial Revenue Department.

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