Dr. Urjit Patel appointed new Governor of Reserve Bank of India

New Delhi: Originally from Mahudha village of Central Gujarat, Dr. Urjit Patel has been appointed new Governor of Reserve Bank of India(RBI).28 October 1963 born Urjit Patel has passed BA from London School of Economics. He has done Mphil from Oxford University. He has done PhD from Yale University. Dr. Urjit R. Patel has been a Deputy Governor of Reserve Bank of India since January 7, 2013.

Urjit Patel and his Gujarat connections

New Governor of Reserve Bank of India(RBI) Urjit Pael is son of Ravindra and Manjulaben who ran a chemical factory Rexo Products Ltd in Nairobi.

Urjit studied in Gujarati community run Visa Oshwal Primary School and later in Jamhuri High School in Nairobi in Kenya.

Urjit has roots in Mahudha village in Kheda district of central Gujarat from where his grandfather first migrated to Kenya. Urjit’s ancestral home in Mahudha is located next to the Ma Amba Mandir in Mahudha. His second cousin Jagdish patel lives in Mahudha. Urjit had last visited Mahudha in 2013. His family has four bighas of land in the village.

Urjit is single and lives in south Mumbai with his mother.

Urjit was made to the board of the Gujarat State Petroleum Corporation(GSPC) in 2006-07 when Narendra Modi was the Chief Minister of Gujarat. Urjit continued to serve till he became a deputy governor of the RBI.

Urjit Patel was made the president of the Gujarat Economic Association(GEA) annual conference in 2010.

Detailed report: Urjit Patel to succeed Rajan as next RBI Governor

New Delhi:Ending months of speculation, Urjit Patel, a Deputy Governor at the RBI, was today named as the next chief of India’s central bank to succeed outspoken Raghuram Rajan, whose tenure was marked by tough measures to control inflation and headline-making statements.

52-year-old Patel, who has been overseeing the monetary policy department at RBI under Rajan and has been known as his ‘inflation-warrior’, will have a three-year term, an official statement said here.

Having worked with the International Monetary Fund, Boston Consulting Group and Reliance Industries among other organisations, Patel will take over after Rajan completes his three-year term on September 4.

He will be among the few with a corporate background to become RBI Governor, the top post at the Mint Street that has been previously held by mostly career bureaucrats or economists at academic institutions.

While Rajan’s exit has been seen in many quarters as driven by his often candid views against various policies of the government, Patel’s appointment as the 24th RBI Governor may end up ensuring continuity of the monetary policy of the current Governor.

Rajan, who went on to earn a reputation of being an outspoken critic on various economic and even non-economic issues, was under attack in recent months from some quarters including BJP MP Subramanian Swamy for what they termed as his priority on inflation control at the cost of growth.

53-year-old Rajan would end up among those with the shortest tenure as RBI Governor.

Ironically, it was Patel who headed a committee on Monetary Policy Reforms that suggested a medium-term target on inflation and a glide-path to achieve the number. It was this report that led to the signing of an agreement on inflation targeting between the government and the central bank.

Doctorate in Economics from Yale and M Phil from Oxford, Patel joined the RBI as Deputy Governor on January 11, 2013 and was given a second term in January this year. He has been the key architect of inflation target and rate-setting panel.

A close lieutenant to Rajan, his appointment is widely seen as ensuring continuity in policy and reforms initiated since 2013.

Patel’s appointment comes at a time when inflation has breached the 6 per cent top range set by the government. He would also have to follow through on Rajan’s efforts to clean-up NPAs at banks.

He was with International Monetary Fund (IMF) between 1990 and 1995 and worked on the US, India, Bahamas and Myanmar desks.

Rajan, who has been credited with helping navigate the Indian economy through tough times, had in June surprised economists when he said he would return to academia and not seek a second term.

Banking sector reforms, halving inflation rate and getting government to target inflation at 4 per cent were other achievments of Rajan.

The renowned economist had also won plaudits for helping arrest the rupee’s decline against the dollar and promote price stability but his focus on arresting inflation by not cutting interest rates also led to bitter criticism from politicians particularly BJP MP Subramanian Swamy.

Just as Patel’s announcement was made, Swamy took potshots at Rajan for allegedly continuing to hold US Green Card.

When one of his followers said Patel is a Kenyan national, Swamy tweeted: “He is not Kenyan citizen but was. R3 was born Indian and chose to continue his US Green Card even though in India from 2007.”

RBI had in June stated that Rajan is an Indian national and an Indian passport holder.

When another follower said if Patel will be hawkish as Rajan, Swamy tweeted: “Don’t be an idiot like the presstitutes.”

Patel is the eighth Deputy Governor in Reserve Bank’s history to be made its Governor and the sixth with an experience at International Monetary Fund (IMF).

He was with IMF between 1990 and 1995, during which he worked at the US, India, Bahamas and Myanmar desks.

Later, he was on deputation (1996-1997) from the IMF to the Reserve Bank of India, before becoming a Consultant (1998 -2001) to the Ministry of Finance.

Incidentally, it was a Saturday when Rajan surprised everyone on June 18 about his decision against a second term, while the announcement for Patel’s appointment also came on a Saturday.

Rajan was also appointed for a period of three years, which has been the case for most Governors so far.

Patel is the eighth Deputy Governor at RBI to be made Governor, the last being Y V Reddy. Besides, at least five former Governors had served at IMF before becoming RBI chief, while a few others went on to work at IMF after leaving the central bank.

However, some Deputy Governors served as Governors only for interim periods.

‘Urjit Patel as RBI Governor is a vote for continuity’

Hailing Urjit Patel’s appointment as RBI Governor as “vote for continuity”, India Inc and experts are unanimous that he is an excellent choice for the top job at the central bank when the economy is passing through a crucial phase.

“We all are very happy. Being a colleague, he brings great continuity and familiarity. He has a clear understanding of what is going on,” said RBI Deputy Governor S S Mundra.

Patel’s colleague further said every new leader will bring his or her own thinking.

“There could be some addition, (in) some processes little bit changes. It’s normal in transition. We are looking for great continuity and that provides great comfort,” Mundra said, adding that the appointment means that it is business as usual from the day one and “ensures smooth transition”.

Patel was today appointed the next Governor after Raghuram Rajan demits office on September 4. He was first appointed Deputy Governor for three years in January 2013 and was given extension this January.

Welcoming the appointment, SBI Chairman Arundhati Bhattacharya said: “Patel has been at the helm of institutionalising the inflation targeting regime in the monetary policy framework. His appointment signals continuity of policy intent, both on part of RBI and the government.”

Bhattacharya was one among the seven names speculated to succeed Rajan as the 24th Governor.

Infosys founder and IT doyen N R Narayana Murthy, who had earlier pitched for a second term for Rajan, said Patel is the “right man” to succeed the incumbent Governor.

“He is the right man to succeed Raghuram Rajan. Who better than him to see what needs to be done to stimulate growth and contain inflation?” Murthy asked.

Industry chamber Ficci hoped that Patel will also ensure continuity of ongoing initiatives at RBI.

“We are confident that RBI and the economy will gain tremendously from Dr Patel’s experience in both private and public sectors,” said Ficci’s President Harshavardhan Neotia.

Director General of industry body CII Chandrajit Banerjee said: “CII is confident that the new Governor will lead the central bank and take its developmental and regulatory agenda to new heights.”

Mahindra and Mahindra Group Chairman Anand Mahindra tweeted: “A very astute move. He’s young, qualified and experienced. Above all, signals policy continuity. Markets should exhale.” .

Former RBI deputy governor K C Chakrabarty stressed on the need for continuity in the central bank’s policies. Rajan recently remarked that there are several unfinished tasks.

“It’s the best that has happened. He is competent and he will be able to deliver,” Chakrabarty said, adding that Patel having worked in the system understands the environment, circumstances and policy measures “much better”.

Government think-tank NITI Aayog’s CEO Amitabh Kant felt that Patel is a “great choice” and has good understanding of microeconomic scenario of India.

Commenting on the appointment, noted economist Jagdish Bhagwati said: “Dr Urjit Patel is a terrific choice. A student of the great Indian economist, Professor T N Srinivasan, and also a macroeconomic expert trained at Yale, Patel will be an ideal Governor who can take over with distinction and continuity from Dr Raghuram Rajan.”

According to industry body Assocham, Patel’s appointment “clearly sends a strong signal” that the government is keen on completing the unfinished agenda of cleaning up of PSU banks’ balancesheets and allowing the banks to work with professionalism and transparency.

Former advisor to erstwhile Planning Commission Pronab Sen said: “This is indicative of continuity. International investors will like that.”

NRI billionaire and Vedanta chief Anil Agarwal expressed hope that the new Governor will continue the policy of the incumbent Rajan.

Listing out challenges before the new Governor, Biocon CMD Kiran Mazumdar Shaw said RBI will have to deal with external factors like currency volatility, Brexit and forthcoming US elections.

Welcoming the appointment, Vallabh Bhanshali of Enam Securities Patel is a “perfectly understandable choice”.

Sajjid Chinoy of JPMorgan expressed hope that there will be no “knee-jerk” change in policy while former CFO of technology firm Infosys Mohandas Pai dubbed it as a “great decision” on part of the government.

MD and CEO of Yes Bank Rana Kapoor saw Patel as an “outstanding choice”.

Director and Chief Investment Officer of Max Life Insurance Mihir Vohra suggested that the new Governor needs to reinforce and continue the faith that the external world and Indian markets have in independence and objectivity of the central bank.

“He should continue to work with the government on reducing long-term inflation expectations and maintain stability in the currency,” he said.

Sunil Godhwani, Whole-time Director and CEO, Religare Enterprises, expressed hope that Patel will continue the good work of balancing inflation while encouraging economic growth.

Patel will contribute to India’s growth story: Jaitley

Finance Minister Arun Jaitley today exuded confidence that Urjit Patel will contribute to India’s economic development as the next Reserve Bank governor.

“I’m sure he will successfully lead the Reserve Bank & contribute to India’s economic development,” Jaitley tweeted while congratulating Patel, who is currently Deputy Governor at the RBI.

Named as 24th Governor of the Reserve Bank, Patel will take over as head of the central bank from Raghuram Rajan on September 4.

Revenue Secretary Hasmukh Adhia also conveyed his best wishes to Patel.

“Congratulations to Patel on becoming RBI Governor. I wish him all the best,” he tweeted.

Government think-tank NITI Aayog’s CEO Amitabh Kant said Patel is a “great choice” and has good understanding of macroeconomic scenario of the country.

Commenting on the appointment, former advisor to the erstwhile Planning Commission Pronab Sen said, “This is indicative of continuity. International investors will like that.”

SBI Chairman Arundhati Bhattacharya said, “Patel has been at the helm of institutionalising the inflation targeting regime in the monetary policy framework. His appointment signals continuity of policy intent, both on part of RBI and the government.”

ICICI Bank MD and CEO Chanda Kochhar said, “As the Deputy Governor of RBI, Urjit Patel has played a key role in developing the new monetary policy framework that has focused on reigning in inflation and has imparted stability to the currency.

“His appointment would ensure a smooth transition and continuity in monetary policy, as India puts in place major structural reforms to transition to a higher growth path.”

The announcement of new RBI Governor ends months of speculation after incumbent Rajan announced that he would return to academia on completion of his three-year term as head of the central bank on September 4.