The Finance Minister Arun Jaitley on Thursday said that Raghuram Rajan's replacement as RBI governor will be announced as soon as the decision would be made.
The Finance Minister Arun Jaitley on Thursday said that Raghuram Rajan’s replacement as RBI governor will be announced as soon as the decision would be made. Reuters news agency quoted the finance minister as saying, “We will let you know when we decide.” Earlier in the day, various media outlets reported that Arun Jaitley met Prime Minister Narendra Modi to discuss about the appointment of new RBI Governor. The current RBI governor, Raghuram Rajan is due to step down on September 4. In his last monetary policy review on August 9, Raghuram Rajan left interest rates unchanged as inflation hit near 2-year high. Many names are doing the rounds including, Subir Gokarn, Urjit Patel, Shaktikanta Das, Ashok Lahiri, Kaushik Basu and KV Kamath.
BRICS Bank chairman, KV Kamath, one of the deputy governers, Urjit Patel, former deputy governer, Subir Gokarn and Senior Vice President and Chief Economist of the World Bank, Kaushik Basu are the names coming to the fore, one of whom will be selected as the next RBI Chief. On Sepember 4, Raghuram Rajan the incumbent RBI governer will have to leave the office. In order to make the transition process smooth the new governor of RBI has to join at least a few days before the present governer exits.
Rajan too as an officer on special duty had joined the RBI 3 weeks before the exit of then governer D Subbarao. Jaitley answered after the speculation that the government will make announcement today had gained ground. Raghuram Rajan’s three year term is dubbed as a Indian banking sector’s reform era. His term was mired in controversies due his criticism of the Narendra Modi government. Lead by BJP MP Subramanian Swamy, many critics had attacked Rajan because of his comments. According to a few, one of the reasons being a star economist became a drawback of Rajan during his tenure was that he didn’t always toe the government line.
Rajan in a letter to the RBI staff said that he would return to the academic world, to the University of Chicago where he served as a professor of economics at the Booth School of Business. It remains to be seen how the new governer and the government will deal with each other.