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Newly appointed Reserve Bank of India’s (RBI) Governor Sanjay Malhotra on Wednesday said that the central bank will focus on maintaining policy stability and continuity while stressing on remaining “alert and agile” to deal with emerging challenges in the dynamic world.
Malhotra, who assumed charge as the 26th Governor of the RBI on Wednesday, emphasised that he would adopt a consultative approach with all stakeholders. He has succeeded Shaktikanta Das, who demitted office on December 10 after completing a six-year tenure at the Mint Street headquarters of the RBI.
The new Governor said with geopolitical tensions, the impact of climate change and geopolitical uncertainties, the world is constantly evolving.
“So, we have to be conscious of the fact that while we do maintain continuity and stability (in policies), we cannot be stuck to it, and have to be alert and agile to beat these (new) challenges,” Malhotra told reporters in his maiden press conference.
Prior to his appointment as RBI Governor, Malhotra was Revenue Secretary in the Ministry of Finance. He had also held the post of Secretary, Department of Financial Services.
“Stability in policy is very important and this is something even in my previous role we were trying to give – stability or continuity in policy – whether it is taxation policy or fiscal policy or monetary policy. All businesses and people do need this continuity and stability rather than a day-to-day kind of a policy. We continue to hold this value, principle of stability,” he said.
Malhotra steps into his role as the RBI Governor at a time when there are concerns over a slowdown in the domestic gross domestic product (GDP) and inflation has surpassed the central bank’s comfort zone.
In the second quarter of the current fiscal, real GDP slowed to a seven-quarter low of 5.4 per cent while consumer price-based inflation (CPI), or retail inflation, surged to a 14-month high of 6.21 per cent in October 2024.
For the new governor, the top-most priority would be maintaining the growth-inflation balance.
Malhotra further said that public consultation is one key pillar of policy making which the RBI does whenever it publishes or finalizes its regulations or master directions.
“This is one thing that I will continue to do so that we are able to carry forward all the functions and objectives with which the RBI has been entrusted with,” he stated.
The Governor said that the RBI in its 90th year has adopted the theme of stability, growth and trust, and he will take it forward.
“Ours is still an economy which needs to develop as we are entering Amrit Kaal and to realise the vision of Viksit Bharat 2047. The huge responsibility that we have in ensuring that the growth that this country actually has, continues,” he said.
On financial inclusion, Malhotra said although a lot of progress has been made on this front, more needs to be done.
“We need to collaborate with financial regulators, central government and state governments so that the benefits of formal financial inclusion reach everyone,” he said.
The Governor said the RBI will focus on using technology to reduce costs and make financial inclusion more accessible to people.
In his brief interaction, Malhotra refrained from discussing any policy-related matter.
“It’s my first day and if I start playing my shots from day one, from ball one, I don’t think it will be appropriate on my part. I would first like to see and understand various issues, discuss with my officers, deputy governors, executive directors, get into the grips of all the different issues that the RBI is supposed to be looking at and then come back to you,” he said.
