Eminent economist, consultant and banker Urjit Patel was on Saturday appointed new Governor of the Reserve Bank of India. Patel will replace Raghuram Rajan, a former International Monetary Fund chief economist who stunned financial markets in June by announcing he would step down in September and return to academia after a single three-year term at the RBI.
Ever since Rajan announced he was opting out of a second term, speculation has been rife over who his successor would be — particularly given the outspoken nature of the incumbent and the eyebrows he raised.
The appointment has been made on the recommendation of the Financial Sector Regulatory Appointment Search Committee (FSRASC) headed by Cabinet Secretary. The committee undertook an extensive exercise to suggest a panel of names to the appointment committee of cabinet (ACC).
One of the RBI’s four deputy governors, Patel, 52, was reappointed in January for another three years. He has run the central bank’s monetary policy department since 2013.
Seen as a close lieutenant to Rajan, Patel headed a committee that introduced landmark changes including a switch to inflation-targeting and adopting consumer prices as the new benchmark instead of wholesale prices. The changes he helped drive are considered to be among the most significant monetary policy reforms since India opened up its economy in 1991.
Patel, born on October 28, 1963, received his doctorate in economics from Yale University in 1990) and M Phil from Oxford (1986). He has worked with the International Monetary Fund (IMF) between 1990 and 1995 covering the US, India, Bahamas and Myanmar desks.
He will be the eighth Deputy Governor to be made Governor at RBI.
He was particularly picked for his expertise in inflation-control, which has become the main task of the central bank, ever since the government, under statute, set it a target of 4 percent, plus or minus two percentage points, based on consumer price index.
He was also a consultant in India’s Finance Ministry, in the Department of Economic Affairs, and an advisor at The Boston Consulting Group. This apart, he has been a non-resident Senior Fellow of The Brookings Institution.
According to some senior officials at the Reserve Bank, Patel was particularly chosen by the IMF in 1996-97 to provide advice on the development of the debt and currency markets in India, as also on banking and social security net reforms.
Some of his stints with the private sector include: President, Business Development with Reliance Industries, Executive Director of Infrastructure Development Finance Company and Board Member of the Gujarat State Petroleum Corp.
Patel worked closely with several central and state government committees — especially those on direct taxes, market studies, anti-trust laws, Prime Minister’s Task Force on Infrastructure and sectors like telecom, aviation, power and pensions.
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