Urjit Patel took over from Raghuram Rajan at the helm of the Reserve Bank of India, where he will oversee the transition to an interest-rate setting panel guided by an inflation target.
Patel assumed charge on September 4, the monetary authority said in a statement yesterday. As Rajan’s deputy for three years until he became the 24th governor, Patel drew prominence for leading a review of the RBI’s mission that led to an overhaul of the 81-year-old institution. He will now need to navigate between the government’s likely expectations of an interest-rate cut in the face of slower economic growth and key state elections, and inflation that has breached the central bank’s target.
He could also face pressure to ease up on a $120bn bad-debt cleanup, which has eroded bank profits and slashed bonuses. Patel’s first test will come on October 4 – a scheduled monetary policy review - where investors will gauge if governorship reduces his traditional reticence.
Now that Patel, 52, has taken up the top job, Prime Minister Narendra Modi’s administration will need to fill his previous post of deputy governor in charge of monetary policy and communication, while also announcing its representatives on the proposed monetary policy committee.