Shaktikanta Das Appointed RBI Governor After Urjit Patel's Resignation

Economy

Former Department of Economic Affairs Secretary Shaktikanta Das has been appointed as the new Governor of the Reserve Bank of India after Tuesday's shock resignation of Urjit Patel.

Written By Ankit Prasad | Mumbai | Updated On:

Former Department of Economic Affairs Secretary Shaktikanta Das has been appointed as the new Governor of the Reserve Bank of India after Monday's shock resignation of Urjit Patel.

Das, a retired 1980 batch IAS officer of the Tamil Nadu cadre holds Bachelor's and Master's degrees in History. He has served in a number of administrative positions apart from Economic Affairs Secretary, including Revenue Secretary and Fertilisers Secretary.

Following his retirement (he had been Economic Affairs Secretary from August 2015 to May 2017), Das was appointed as a member of the Fifteenth Finance Commission and as India's Sherpa to the G-20.

The appointment of Das comes just about 24 hours after Urjit Patel resigned from the post of Governor of India's central bank citing personal reasons. His resignation followed a weeks-long high profile standoff with the government over a range of issues, that was precipitated by a tempestuous speech by RBI Deputy Governor Viral Acharya in which it was inferred that the independence of the RBI had been threatened.

READ | Urjit Patel Steps Down As RBI Governor. Here's The Official Statement

Following Acharya's speech there was enormous discussion, deliberation and speculation over the precise nature of the tension between the RBI and the government (Acharya had left little unsaid). Over the next month and a half, this list became quite long and came to include at least the following items, most of which have been acknowledged in some way or the other:

  • The government beginning consultations under the Section 7 of the RBI act that allows the government to issue direction to the RBI
  • Difference of opinion with the Finance Ministry over the Prompt Corrective Action (PCA) framework that had been imposed on a number of PSU banks depending on criteria related to their exposure to NPAs
  • Liquidity concerns pertaining to NBFCs and the state of India's MSMEs
  • The suggestion (confirmed by current Economic Affairs Secretary Subhash Chandra Garg) that the government may pursue amendments to the RBI act in order to effect changes, such as the creation of specialised committees. Critics said this would dilute the powers and authority of the RBI Governor.
  • The suggestion (not refuted by current Economic Affairs Secretary Subhash Chandra Garg) that the RBI's board should take a more hands-on approach to operational matters in the RBI
  • Debate over the RBI's surplus capital and the framework of its transfer to the government

For a full account of the sequence of events that led to Urjit Patel resigning as RBI Governor, read here.

READ | "Saddened, Not Surprised", Says A Vindicated P Chidambaram On RBI Governor Urjit Patel's Resignation

Urjit Patel had been appointed as a Deputy Governor at the RBI in 2013 taking up the post of Governor in September 2016 following Raghuram Rajan's exit. 

Published:
By 2030, 40% Indian will not have access to drinking water
SAVE WATER NOW
PEOPLE HAVE PLEDGED SO FAR
DO NOT MISS