Shaktikanta Das To Take Charge As RBI Governor, Will Address News Conference: LIVE UPDATES

Economy

Shaktikanta Das is expected to take charge as the Governor of the Reserve Bank of India (RBI) on Wednesday, entering India's central bank at a time when it is in the news like never before over the events of the last 2 months (in a micro sense) and about 2.5 years if you look at the macros.

Written By Ankit Prasad | Mumbai | Updated On:

Update at 4:20 PM: "I am open to discussing all issues": New RBI Governor Shaktikanta Das

"I will uphold the dignity and credibility of the RBI as an institution. It will be intact."

Update at 4:05 PM: Newly appointed RBI Governor Shaktikanta Das addresses a news briefing

"I assumed charge this morning as the 25th governor, RBI is a great institution and has a rich legacy. I will try to my best to uphold the credibility of this institution": New RBI Governor Shaktikanta Das

"I am looking forward to work with the officers and the entire team of the RBI, it is a great opportunity for me."

"Decision making in today's world has become very complex and so I will be open to taking consultations wherever necessary for critical issues."

"I will hold a consultation with the MDs and CEOs of public sector banks based in Mumbai and subsequently, I will have one with the private banks as well"

WATCH the full address of the newly appointed RBI governor here. 

Update at 3:26 PM: "Shaktikanta Das is a very sensible & forward-looking officer. He has been in the revenue & finance dept & handled budgets of Government of India. He’ll add immense value to RBI as far as its independence & autonomy is concerned": Amitabh Kant, NITI Aayog CEO


Shaktikanta Das is expected to take charge as the Governor of the Reserve Bank of India (RBI) on Wednesday, entering India's central bank at a time when it is in the news like never before over the events of the last 2 months (in a micro sense) and about 2.5 years if you look at the macros. To add to it all, he is already facing Opposition criticism.

Das, a 1980 batch IAS officer of the Tamil Nadu cadre, was the previous Economic Affairs secretary under the Modi government and served in a number of economy-related bureaucratic posts before that, including as Revenue secretary and Fertilisers secretary, meaning that he has been a career civil servant, in contrast to his two direct predecessors Urjit Patel and Raghuram Rajan who were both economists. That's not to say that bureaucrats don't become RBI Governor -- the two before Rajan, namely Duvvuri Subbarao and YV Reddy were IAS officers as well, though they also held advanced economics degrees. 

Kapil Sibal has picked up on the thread, tweeting:

This goes along with the Congress's criticisms during the much-discussed RBI versus government standoff over which former Finance Minister P Chidambaram has been particularly outspoken.

Das is expected to reach the RBI's headquarters in Mumbai at 10 am on Wednesday and may hold a meeting with Deputy Governors of the RBI, including Viral Acharya whose tempestuous and fire-brand (in economic terms) speech triggered the stand-off by putting word out publicly that the RBI's independence may be under threat.

Crucially, Shaktikanta Das is also expected to take a call on the RBI's board meeting, which is scheduled for Friday. The meeting is important, not only because there's a new Governor, but because there are key items that were discussed in the previous (November 19) marathon meeting where the RBI's top brass and members of the government who are on the board, namely Shaktikanta Das's successor as Economic Affairs Secretary Subhash Chandra Garg and Financial Services Secretary Rajiv Kumar as well as RSS ideologue S Gurumurthy, came face to face. In that meeting there had appeared to be a compromise (given that Patel didn't resign) but the events of Monday (when he did) cast a shadow over what will come on the action items that were put out after that meeting, in particular, the status of the expert committee that was to be constituted to 'fix the appropriate economic capital framework of RBI' or how the RBI's surplus reserves are to be transferred to the government. 

Here's a laundry list of items over which the RBI and government had been at loggerheads, 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

And here's the statement that was issued after the previous RBI board meeting, including action items:

 

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