Former economic affairs secretary Shaktikanta Das has been appointed as the new Governor of the Reserve Bank of India, an order from the Department of Personnel & Training said on Tuesday evening.
Das is a 1980 batch IAS officer of Tamil Nadu cadre and will hold the post for three-year term. He is also a member of the 15th finance commission, and has been a former director at insurance behemoth Life Insurance Corporation of India.
Shaktikanta Das follows Urjit Patel as the RBI governor who sent a shocker on Monday by resigning amid a month-long standoff with the government on multiple issues.
Das’ appointment, which presumes greater significance now since a person from the North Block is moving to the Central Bank, has met with mixed reactions.
“It is unfortunate that a person who was instrumental in bungling of the government’s demonetization drive has been appointed as the Governor,” said independent banking analyst Hemindra Hazari. “This clearly sends a signal that loyalists will be rewarded,” he added.
Some experts, however, feel that Das given his experience of the way the government functions and by being on RBI’s board, may as well be an appropriate fit as he would be in a better position than someone else to be able to strengthen the communication channels between the Finance Ministry and the Central Bank.
“This was more or less expected. His name was doing the rounds. The only challenge for him will be to explain the change in stance of the Reserve Bank if any from here on,” said Madan Sabnavis, Chief Economist at CARE Ratings.
Sabnavis added global rating agencies including the likes of S&P and Fitch will be closely observing the developments on this front.
