A YEAR AT RBI : KEEP CALM , DO WHAT’S NEEDED

A YEAR AT RBI : KEEP CALM , DO WHAT’S  NEEDED

RBI AND THE GOVERNMENT HAD  DIFFERENCES ON MANY OCCASIONS, BUT THE GOVERNOR DIDN'T LET

IT PLAY THEM OUT IN PUBLIC

Shaktikanta Das was appointed as the governor of RBI on Dec 11, 2018 within just one day of the resignation of former governor Urjit Patel.  Shaktikanta Das served as economic  affairs secretary with the government of India before becoming  governor.  RBI observers say that he had demonstrated natural instincts and it provided them with accurate solutions to the pressing issues.  Das has been described as gentle, soft-spoken,  and a balanced person by RBI staffers.  He always behaved in a pleasant manner with his RBI staffers and colleagues and at the same time he took effort in assuring colleagues that  RBI is in his safe period.

The key agenda Das always followed is growth. During the time of his first press conference he promised that he will uphold autonomy, integrity and credibility of RBI. Government is not only a stakeholder and hence there occurs  major discussion between RBI and the government regarding major policies. Though RBI  mainly targets on inflation, the maintenance of  growth of Indian economy is also a concern.  Das did not show any mercy on bank continuing with bad debt, also it fined the banks which are not following guidelines. RBI had a 3 trillion of liquidity in the banking system through secondary market bond purchases.

The NBFC  crisis and cooperative bank crisis had been handled in a smooth way by Mr. Das. Das completely remoulded a circular issued by Patel. With the revised circular of June 7 bank has more flexibility and incentive to resolve bad debts efficiently. M K Jain rebuked the government of both state and central level. And Das called for urgent public sector bank board reforms and improvement in corporate governance of both bank and non banks. 

Government believed in Das and RBI led by him. Even though RBI and the government had differences in many occasions. Main issues were the transfer of RBI surplus  to the government and the sovereign bond issuance. Das  did this in a gentle persuasive manner.

India has a average growth rate  of 7.5%, but it has to grow about 8% to avoid the problems of poverty.  The government and RBI had to continue to work together in order to achieve the National objective of reviving growth.