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Michael Patra appointed RBI deputy governor for 3 years, likely to handle monetary policy department

FP Staff

The government has on Tuesday appointed career central banker Michael Debabrata Patra as the deputy governor of the Reserve Bank of India (RBI). Patra, who was earlier the executive director at the RBI, has been appointed for a period of three years, said news reports.

Patra will be the fourth RBI deputy governor and is expected to get the charge of the monetary policy department, which was earlier with Viral Acharya, said a report in The Economic Times. The new deputy governor was the executive director, Monetary Policy Department, at the RBI.

Patra, a PhD in Economics from IIT-Mumbai, is also a member of the Monetary Policy Committee (MPC), the report said. He will fill a vacancy left by former deputy governor Acharya, who resigned in June last year, six months before the scheduled end of his term in office, reported Reuters.

Last year, Acharya cited personal reasons for his departure but had previously clashed with Prime Minister Narendra Modi's government over an erosion of the central bank's independence. He was the third key senior central bank official under the Modi government to resign, following the departures of former RBI governors Raghuram Rajan in 2016 and Urjit Patel in December 2018.

Patra, who had applied for a deputy govenor's post in 2017, has been a part of the central bank's monetary policy committee since its inception, and has long been viewed as a monetary policy hawk.

However, since governor Shaktikanta Das took office in December last year, Patra has voted for three successive rate cuts and has said the economy needs fiscal support in the current environment.

"It's an excellent decision. He is an accomplished monetary economist with not just strong academic credentials but also has a rich understanding of ground-level economic realities of India. This is the best choice in my opinion," said Rupa Rege Nitsure, chief economist at L&T Financial Holdings, to Reuters.

Patra's PhD thesis was titled "The Role of Invisibles in India's Balance of Payments: A StructuralApproach". As a Fellow of Harvard University, he undertook post-doctoral research in the area of financial stability.

The new RBI deputy governor has had a distinguished career as a central banker since 1985 and has worked in various positions in the RBI, according to IIT-Bombay website. Before becoming the executive director at the central bank, Patra was the principal adviser of the Monetary Policy Department, RBI, since July 2012.

He has worked in the International Monetary Fund (IMF) as senior adviser to the executive director (India) between December 2008 and 30 June 2012, when he actively engaged in the work of the IMF's executive board through the period of the global financial crisis and the ongoing Euro area sovereign debt crisis. Patra's book titled The Global Economic Crisis through an Indian Looking Glass vividly captures this experience.

He has also published numerous papers in the areas of inflation, monetary policy, international trade and finance, including exchange rates and the balance of payments, says the IIT-Bombay website.

The selection process

Earlier, the Financial Sector Regulatory Appointment Search Committee (FSRASC) reportedly interviewed 10 candidates including Patra and external MPC member Chetan Ghate among 3 other economists, two IAS officers for RBI's deputy governor's post.

Ghate is an external member of RBI's Monetary Policy Committee.

IAS officer Kshatrapati Shivaji was also said to be in the list for the position of RBI's deputy governor. He has been the CEO of SIDBI and principal secretary in the Ministry of Finance and is currently India's executive director at ADB (Asian Development Bank).

Arunish Chawla, a bureaucrat currently in Washington at Indian Embassy economic wing and Manoj Govil, the principal finance secretary of Madhya Pradesh have possibly been interviewed for the post, reported IANS.

However, there were no official communications on the interviews conducted on 7 November for the post.

The search panel FSRASC is headed by Cabinet Secretary and also includes RBI governor, financial services secretary including independent members.

Having previously worked as the CEO of SIDBI and principal secretary in the Ministry of Finance, Shivaji has been serving as an executive director of the ADB since December 2016.

In August last year, the government had invited applications to fill the deputy governor's post. The advertisement said the applicant should have at least 25 years of work experience in public administration, including at the level of secretary or equivalent in the central government. Candidates in an Indian or international public financial institution could also apply. The appointment was for three years and the person was eligible for reappointment.

FSRASC is responsible for selecting the eligible candidate. The central bank has four deputy governors of which two are appointed from outside, one a commercial banker and the other, an economist. The remaining two are promoted from within the RBI.

After Acharya resigned last year, BP Kanungo, a deputy governor of the RBI, was given the charge of the monetary policy department and was inducted into the six-member monetary policy committee.

€" With inputs from agencies

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