Urjit Patel, the new Governor of RBI who has maintained a contrasting low-profile to outspoken Raghuram Rajan, has his immediate task cut out – finishing the ‘unfinished agenda’ of his predecessor on completing ‘deep surgery’ of banks and winning the war on inflation.
Incidentally, it was Dr. Patel who scripted a new framework for fighting price rise, which earned him the informal title of ‘inflation warrior.’ However, it is the ‘deep surgery’ ordered by Dr. Raghuram Rajan to clean the balance sheets of banks that may pose greater challenges for Dr. Patel, as a number of banks, corporates and others have been lobbying hard against what they call the ‘unwarranted urgency’ shown by the RBI in this regard at the cost of hurting investments.
The 52-year-old Dr. Patel’s appointment as the 24th RBI Governor is effective Sunday, though his first working day could be September 6, due to Monday being a holiday for Ganesh Chaturthi.
A number of corporate leaders and bankers who have previously worked with Dr. Patel said he was expected to show “much better understanding” of the problems companies and banks are facing due to the central bank’s AQR (Asset Quality Review) directive.
Some are even hopeful that the AQR may actually see some change, though Dr. Rajan had said that the process should be completed by March 2017.