Who is Urjit Patel? All you need to know about the new RBI governor

After a period of long suspense and several names being floated by the media, the government on Saturday announced that Urjit Patel would be replacing Raghuram Rajan as the new RBI governor. Patel is currently the deputy governor of Reserve Bank of India. He joined as RBI deputy governor on January7, 2013. He will be India's 24th RBI Governor. 

In his long illustrious career, Urjit Patel has been part of many globally famed organisation. Patel served as the Chief Policy Officer at IDFC Limited from 1997-2006. He also served as a consultant to the Ministry of Power, Department of Economic Affairs, New Delhi from 1998 to 2001 and served at the International Monetary Fund.

Patel was one of the four deputy governors, and was reappointed in January in three years. He has been running the central bank’s monetary policy department since 2013. Some consider Patel to be a ‘hawk’ on his monetary policy stance, and has been criticised because he kept liquidity tight at a time when the RBI was lowering rates.

While Patel lacks the rock-star status accorded to Rajan for defusing a currency crisis and lowering inflation, Patel is known as a safe hand whose policies are similar to Rajan.  Urjit Patel beat former deputy governors Rakesh Mohan and Subir Gokarn and State Bank of India Chairman Arundhati Bhattacharya to the job. His appointment is largely seen as giving a message to the investors that the govt believes in continuity when it comes to monetary policy. 

Patel, 52, headed a panel that recommended landmark changes to monetary policy in India, including a switch to inflation-targeting and the creation of a panel to set interest rates. He will start his three-year term on Sept. 4.
"The Appointments Committee of Cabinet has approved the appointment of Dr. Urjit R. Patel as Governor, Reserve Bank of India for a period of three years," said the statement from the government.
Patel, who has a doctorate from Yale, had widely been seen as ensuring the most continuity among the candidates believed to be in the running to be the next governor.

Seen as a close lieutenant to Rajan, Patel will now get to implement the policies he had helped shape.

The government is soon expected to announce the composition of a six-member monetary policy committee to decide on interest rates. It will be made up of himself and two other RBI officials, along with three members appointed by the government. Rajan, who succeeded in halving the inflation rate from the double digit levels prevailing when he took over, also persuaded the government to adopt inflation targeting, setting a medium term central target of 4 percent, within a range of 2 to 6 percent - another policy endorsed by Patel.

The new governor takes over at a time when inflation has bust out of the top end of that range. Consumer inflation accelerated to 6.07 percent in July, the fourth consecutive month it has stayed above the RBI's near-term target of 5 percent by March. Aside from controlling inflation, the new governor will have to follow through on efforts to clean-up banks' bad loans so that they can once again support the investments needed if India is to keep its place as one of the world's fastest growing economies.

The appointment has been made based on recommendations of the Financial Sector Regulatory Appointments Search Committee (FSRASC) headed by Cabinet Secretary, said the release.  Patel has a doctorate from Yale University, an M Phil Economics from Oxford University and B.Sc. (Economics) from University of London.

Patel has been known as 'inflation warrior' of Rajan, who made a surprise announcement in June that he would return to academia after end of his current three-year tenure. In recent months, Rajan has come under attack from some quarters, including BJP's Rajya Sabha MP Subramanian Swamy, for what they call his reluctance to lower interest rates and giving priority to inflation control.

Prior to his appointment as the Deputy Governor at RBI in 2013, Patel was advisor (Energy and Infrastructure) with Boston Consulting Group, while he has also worked with Reliance Industries in the past.
Patel, born on October 28, 1963, received his doctorate in economics from Yale University in 1990) and M Phil from Oxford (1986). 

He has worked with the International Monetary Fund (IMF) between 1990 and 1995 covering the US, India, Bahamas and Myanmar desks.He will be the eighth Deputy Governor to be made Governor at RBI. 

With agency inputs