Central bank governorship is not an easy job in best of times, especially when one has to contend with an unheard of demonetisation and to set up an institution like the monetary policy committee (MPC).
Managing a banking system that has accumulated 10 trillion rupees of bad loans that too in a highly uncertain global environment is not an easy task.
AK Bhattacharya, editor, Business Standard, Bahram Vakil, founding partner, AZB & Partners, Rathin Roy, director, NIPFP, member, EAC-PM and Hemendra Kothari, chairman, DSP Blackrock Investment Managers discuss how the Reserve Bank of India (RBI) governor Urjit Patel has fared in the two years he has been at the helm and what are the challenges ahead of him.
AK Bhattacharya: To asses, Urijit Patel is a difficult task. Unfortunately, whatever other wonderful things he has done, demonetisation will always be talked upon when one talks of him.
However, the MPC and the inflation targeting policies have been good, Bhattacharya said.
“Right from the first policy he undertook as governor, he has stuck to the blueprint that was created by the government on the basis of the committee that he had headed,” said Bhattacharya, adding that so far Patel and his team had done well.
Bhattacharya said the admirable thing about the bank cleanup process is that the RBI and the governor held their ground in every step they took, including the February 12, 2018 notification.
“The RBI did not succumb to any pressure whether discreet or direct or indirect or even in the face of court process where the government had given an affidavit for a special dispensation for the power sector,” said Bhattacharya.
Bahram Vakil: Patel has been a hands-on governor with very brisk communications.
Rathin Roy: The governor’s role in developing the MPC has been very good in three ways – one, the MPC is now established as an institutional process. Two, the governor has successfully managed to make sure that the opinions expressed by the MPC are largely consensual and demonstrably free from external influence. Three, the governor himself in his comments have shown exemplary professional and technical leadership in making case for his view within the committee.
Hemendra Kothari: Patel has done well in times of uncertainties in the domestic financial sector, as well as he undertook various banking reforms.
He has handled the NPA problems very firmly and calmly, said Kothari, adding that he has also managed to win the confidence of investors.