With Urjit Patel’s resignation, Govt pulls in Shaktikanta Das as the new governor of RBI

NewsBharati    11-Dec-2018
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New Delhi, December 11: Citing personal reasons, Urjit Patel’s resignation as the RBI governor gave a major thunderbolt attack to everyone. Letting bygones be bygones; the government of India on Tuesday appointed Shaktikanta Das as the new governor of Reserve Bank of India for a period of three years.

 

The appointments committee of the cabinet cleared Shaktikanta Das as the new governor and being appointment for a period of three years. Shaktikant Das, a retired 1980 batch IAS officer of Tamil Nadu cadre, was India’s Sherpa to G20. During his career as an IAS officer, he served in various capacities for the Indian and Tamil Nadu governments.

With the appointment of the new governor, Das’s has many tasks to accomplish. Das’s appointment follows a damaging tussle between RBI and the government over independence of central bank and regulation of weak public sector lenders. He has the task of mending the relations at a time the role of the RBI and its policies on managing liquidity and regulation of banks have come to the scrutiny of the government.

Shaktikanta Das is known for being an experienced bureaucrat who has held key positions both under the ruling Bharatiya Janata Party as well the previous Indian National Congress-led government. Das was the economic affairs secretary to the Government of India till May 2017 and was in office when demonetisation was announced. Das toed the government’s line that demonetisation would help reduce unaccounted wealth in the economy, bring down the problem of counterfeit money and help push digital payments. He had also countered the concerns over the growth impact of demonetisation by saying that any short-term dip in growth has been factored in.

The appointment of this new governor, is likely to cheer markets as investors expect communication between the government and the central bank to improve following a public spat that deepened an existing rift between the two sides.