DNA Money Edit: Challenges for new RBI governor

A day after the exit of Reserve bank of India (RBI) governor Urjit Patel, the government has swung into action and named a successor. The 61-year old Shaktikanta Das, former secretary of the Department of Economic Affairs in the finance ministry and currently a Finance Commission member, has been chosen to head the central bank for the next three years. 

Surely, it is a big challenge for the retired Tamil Nadu cadre IAS officer. Given his rich experience in finance and economy and expertise in team management, his priority will be to sort out the differences between the RBI and the government and chart out an aggressive strategy, going forward.

As suggested by global rating firm Fitch, Patel's exit may raise India's risk perception as it followed a month-long face-off over a host of policy matters with the government. The central bank has been under pressure to relax rules for some public banks sitting on a pile of bad loans to lend more freely and to transfer some of its surplus capital to the government.

Interestingly, the stock market did not crash on Tuesday as many had predicted after Patel's exit. While Sensex dropped 517 points in the morning trade, it ended the trading 190 points up, reclaiming the 35000-mark. The rupee, too, opened at 112 paise down, slipping to 72.44 against the US dollar, but recovered as the day progressed and ended 53 paise lower at 71.85.