Raghuram Rajan appointed 23rd RBI governor

Moneycontrol Bureau

Raghuram Govind Rajan, the country's chief economic advisor to the Finance Ministry, will take up the mantle of governorship in the Reserve Bank of India (RBI) from September 5. The present incumbent - D Subbarao will demit his office on September 4, this year.

"Prime Minister has approved the appointment of Dr. Raghuram Rajan as the Governor of Reserve Bank of India (RBI) for a term of three years, vice Dr. D. Subba Rao upon completion of his (Dr. Rao's) tenure," the government said in a release on Tuesday.

Rajan is going to be the 23rd governor of India's the central bank since May 19, 1975 when N C Sengupata had assumed the responsibility. With this move, it scorched all speculations for the top post of the banking regulator. The other two names, which were floating around included the Planning Commission member Saumitra Chaudhuri and economic affairs secretary Arvind Mayaram.

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Dr Rajan (50) has worked extensively in the field of economics across the world. He is an Indian economist who served as Eric J. Gleacher Distinguished Service Professor of Finance at the Booth School of Business at the University of Chicago. He is also a visiting professor for the World Bank, Federal Reserve Board, and Swedish Parliamentary Commission.

Besides, he has served many other international bodies before becoming the chief economist of the International Monetary Fund (IMF). Finally, he entered the north block in August, 2012 to serve as the economic advisor in the ministry of finance.

"It is a great honour to be appointed as RBI governor. It is a challenging time for Indian economy. Both the government and RBI are working together to tackle it. There is no magic wand to disappear the economic problems overnight. No doubt, India will deal with its problem," Dr Rajan said in a press breifing in New Delhi.  

He is assuming the post at a time when Indian economy is going through a rough weather. By RBI's own submission in the first quarter (April-June) monetary policy, it is facing the "impossible trinity" or trilemma of controlling foreign exchange rate, the rate of inflation and the monetary policy stance. The job for the new RBI boss, many believe, is going to be an uphill task.

saikat.das@network18online.com