New RBI governor vows to uphold autonomy

Shaktikanta Das, the new Reserve Bank of India (RBI) was quick to dispel any impression that he is coming with a baggage from the finance ministry.

In his maiden press conference he called hours after he took charge as RBI's 25th governor Das said, "I will uphold the autonomy, integrity and the professionalism of RBI." He gave comfort to the market, saying all contentious issues can be resolved by discussions with the stakeholders.

"I would like to believe all issues howsoever contentious can be resolved. The Board meeting of RBI scheduled for December 14 will be held as scheduled," he said.

On asking him what prompted him to speak of autonomy in his maiden speech as governor, he said, "If I don't speak about it then the interpretation will be that I have sort of completely ignored it since I have a background in the government. So I was making the ground rules very clear," he said, speaking at the RBI headquarters at Mint Street in Mumbai where he will hold the fort for three years.

"Whatever the issues every institution has to maintain its professional integrity and autonomy. At the same time every institution must also adhere to rules of accountability," Das said.

He said economic growth would be a priority with a benign outlook on inflation. Inflation targeting and growth, he said, are the mandates of RBI.

"After the amendment of the RBI Act, inflation targeting continues to be very important. It is very heartening to know that the inflation is broadly as per the targets. Inflation outlook looks fairly benign. The maintenance of the growth trajectory of the economy is also important," Das said, giving hope to the market of a rate cut in the next policy review in February.

He displayed his skills as a consensus player, saying he would open the channels of communications with banks, the government and other stakeholders so that a common ground can be built on critical policy issues.

"There has to be free and fair objective and frank discussions between the government and RBI. Government is not only a stakeholder, but the government of the day runs the economy and the country, controlling major policy decisions," he said.

While acknowledging his predecessor's Urjit Patel's stewardship of RBI, he said that the preamble of the RBI Act requires maintaining price stability "keeping in mind the objective of growth". Hence, he said "maintenance of the growth trajectory of the economy is also important".

Decision making in the modern times has become very complex, so consultations with all stakeholders is very important to understand issues. "To begin with, I have convened a meeting with chief executives of public sector banks. As you know banking is an important segment of our economy and it is currently facing a lot of challenges." The governor will also meet with the chiefs of private sector banks. Liquidity issues will also be discussed.

On the transfer of RBI's reserves, he said a committee will be constituted shortly, and it will depend on who is the chairman and the mandate of the committee.

"Life is never simple, there are multiple challenges. We will deal with them as it comes," he said.