RBI's Shaktikanta Das named Governor of the Year at Central Banking Awards 2023

Reserve Bank of India (RBI) governor, Shaktikanta Das, has been named Governor of the Year by the Central Banking Awards 2023 on Wednesday, March 15. He has been recognised for his leadership, and for his handling of multiple crises that have arisen during his tenure.

Das took office in December 2018, just as the financial sector in India was on the brink of collapse and moving through the first and second waves of the coronavirus. He has overseen the resolution of several collapsed non-bank financial companies and the steady improvement of the banking sector, which had long been a drag on growth.

Prior to Das's appointment, in August 2018, IL&FS, a significant non-banking financial company, went bankrupt, triggering a liquidity crunch and revealing deficiencies in the business models of several mid-sized banks that had lent heavily to NBFCs.

Subsequently, several other firms, including Punjab and Maharashtra Co-operative Bank, also collapsed. Das's predecessors, Raghuram Rajan and Urjit Patel, had already initiated some measures to address the non-banking financial crisis, such as revising the bankruptcy code to resolve NBFCs, but additional measures were implemented during Das's tenure.

These included implementing liquidity regulations for non-banks and closer supervision of major players in the sector. In October 2022, a new scale-based regulatory framework for NBFCs was introduced.

While non-banks are vital to the Indian financial sector, the banking sector remains the more significant issue, exerting a drag on growth and sometimes threatening to plunge the economy into crisis.

Public sector banks (PSBs) have the most profound challenges, with high levels of non-performing assets (NPAs), weak capital, and little lending growth. However, since 2018, there has been a steady improvement in the banking sector, which looked to be in dire straits at the time.

Das has also managed the response to the COVID-19 pandemic and its economic impact, as well as Russia's invasion of Ukraine and its inflationary impact. Despite the challenges, India's economy has continued to grow at a breakneck pace, and poverty has fallen significantly.