Published on: December 10, 2024

NEW RBI GOVERNOR

NEW RBI GOVERNOR

NEWS – Sanjay Malhotra appointed as the 26th Governor of the Reserve Bank of India.

HIGHLIGHTS

  • Tenure: Three-year term starting December 11, 2024.
  • Predecessor: Incumbent Shaktikanta Das stepping down on December 10 after six years as Governor.

Announcement and Context

  • Approval: Appointments Committee of the Cabinet approved the appointment.
  • Significance: Malhotra’s appointment occurs amid challenges in the banking sector and preparations for the 2025 Union Budget.

Sanjay Malhotra’s Profile

  • Education:
    • Computer Science graduate from IIT Kanpur.
    • Masters in Public Policy from Princeton University.
  • Professional Experience:
    • Revenue Secretary, responsible for direct and indirect tax policy.
    • Former Financial Services Secretary, overseeing public sector banks and insurance.
    • Chairman and Managing Director of Rural Electrification Corporation (REC) Ltd.
    • Key member of Finance Minister Nirmala Sitharaman’s team.

Role and Responsibilities as RBI Governor

  • Banking Sector Oversight: Regulating banking and financial services, focusing on unsecured retail lending and fintech challenges.
  • Monetary Policy: Chairing the Monetary Policy Committee (MPC) meetings starting February.
  • Economic Challenges: Balancing GDP growth slowdown and persistent food inflation.

Historical Context of RBI Governors

  • Office Details:
    • Established in 1935; 25 Governors have served so far.
    • Current rank: Equivalent to Cabinet Secretary.
  • Notable Predecessors:
    • Sir Osborne Smith: First Governor.
    • Sir C.D. Deshmukh: First Indian Governor.
    • Manmohan Singh: 15th Governor and later India’s 13th Prime Minister.
    • Shaktikanta Das: Outgoing Governor, also a former Revenue Secretary.
  • Unique Aspects:
    • Governor’s signature appears on Indian currency notes.
    • Member of the Strategic Policy Group under NSA Ajit Doval.

Term Details

  • Standard Term: Three years, with possible extensions up to two additional years.
  • Historical Records:
    • Longest tenure: Sir Benegal Rama Rau (7+ years).
    • Shortest tenure: Amitav Ghosh (20 days).

Challenges Ahead for Malhotra

  • Economic Growth: Addressing the slowdown to a seven-quarter low of 5.4%.
  • Inflation: Managing food inflation while steering interest rate policies.
  • Sectoral Regulation: Monitoring fintech and retail lending practices.