Former International Monetary
Fund (IMF) chief economist Dr. Raghuram g. Rajan took over as the 23rd Governer of reserve bank of India on
September 4, 2013 for three years. Dr. Rajan, who was also the chief economic
advisor to the government of India, succeeded Dr. D. Subbarao. At 50, he is one
of the youngest to become RBI Governor. His appointment came as one of the few
bright spots amid the economic gloom that has pervaded the country presently.
The optimism stems from the fact that Dr. Rajan is truly a world-class
economist who had correctly predicted the global turmoil of 2007-09.
Dr. Rajan is set to take over
the mantle of the central bank at a time when the economy is faced with
multi-pronged crisis of high consumer price inflation, industrial slowdown, a
free fall of the rupee and a widening current account deficit (CAD)
After assuming office, Dr. Rajan
set out a list of his priorities. These included measures to deepen securities
markets, and improve financial inclusion including for small and medium
enterprises (SMEs) sector. Vowing to preserve the value of Rupee, he announced
that the RBI would take steps to establish the Rupee as an international
currency. Highlighting the importance of inflation targeting, he said that the
main role of the RBI was to ensure monetary stability by sustaining confidence
into value of rupee.
Other salient measures that Dr.
Rajan set out include liberalised branching for the scheduled domestic banks,
for which licenses will be issued by January 2014. Also, foreign banks will be
persuaded to move to wholly-owned subsidiary structure.
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