A raucous crowd greeted the 22nd governor of the Reserve Bank of India, Duvvuri Subbarao, on his first day in office. As he alighted from a Chevrolet Optra and strode towards the central bank edifice, Subbarao must surely have been taken aback by the large gathering waiting to receive him, probably giving him a sense of the expectation surrounding his appointment.
The media erupted at the sight of him. The staccato of camera shutters followed by blinding flashlights greeted the new governor. Jostling reporters thrust microphones to grab a soundbite from the man whose signature will now appear on Indian currency. A man who could have a say on how your home loan payout shapes up.
And as he made his way through the security cordon carved through the multitude of unfamiliar scribes, Subbarao stepped into a warm hug from deputy governor Rakesh Mohan, who was also in the reckoning for the top job. Mohan now heads to the World Bank, leaving his position vacant at the central bank.
Also at hand to greet the new governor were leading bankers like KV Kamath of ICICI Bank, OP Bhatt of SBI, Naina Lal Kidwai of HSBC and Rana Kapoor of YES Bank. ?Taking over at a time when inflationary pressures are threatening to thwart the high growth of the past five years, the entire nation trains its eyes on the actions that Subbarao takes,? said a leading banker. In stark contrast to the rock star-like excitement outside, the mood was sombre on the 18th floor of the RBI building on Mint Road.
YV Reddy, who had spent 11 years at the apex bank, five as the governor, was ready pass on the baton. ?Yaga?s raga now ends,? quipped a scribe as the outgoing governor signed the handover documents. The emotion was palpable. Subbarao started off by saying, ?First of all, I want to place on record my appreciation and admiration for Venugopal Reddy, who led the RBI with dignity, distinction and above all intellectual integrity over the last five years. It will be my challenge to succeed into the formidable reputation that he has established for himself.?
Subbarao then deftly moved on to articulate his plans and the challenges ahead: ?The immediate priority will be to manage inflation and anchor inflation expectations. The priority in the short to medium term will be, of course, to pursue financial sector reforms in the context of financial stability, price stability and, above all, an ear firmly to the ground on real sector reforms.? Reddy welcomed Subbarao, mentioning that theirs was a 30-year long friendship. ?And I value it,? Subbarao added, as he left the room, leaving Reddy to ride into the sunset.
