Patel takes over as new RBI Governor

Mumbai: Facing a tough task of maintaining the legacy of his predecessor Raghuram Rajan, Urjit Patel has assumed charge as the 24th Governor of Reserve Bank with several immediate priorities, including clean up of banks and containing inflation without hurting growth.

Patel assumed charge effective September 4, 2016, after serving as deputy governor since January 2013, RBI said in a statement today.

He was reappointed as deputy governor on January 11, 2016, after completion of his first three-year term in office.

His immediate task cut out — finishing the ‘unfinished agenda’ of his predecessor on completing ‘deep surgery’ of banks and winning the war on inflation.

Ensuring undisruptive redemption totalling USD 20-25 billion, getting used to the idea of Monetary Policy Committee and bank cleanup are the main challenges before the new Governor.

According to Rajiv Kumar, Senior Fellow at Centre for Policy Research, the first task before him is to get used to the idea of working with the Monetary Policy Committee (MPC).

“He has to devise a way of working with the committee and getting to the objective of meeting inflation target. Besides, containing food inflation is another challenge before him,” Kumar said.

If food inflation raises its head again then what strategy he will employ to contain it, he asked.

Incidentally, it was Patel — often referred to as ‘Dr Patel’ by Rajan — who scripted a new framework for fighting price rise, which earned him the informal title of ‘inflation warrior’. .