The newly named Reserve Bank of India (RBI) Governor Urjit Patel has a tough act to follow. In his three-year term, outgoing central bank chief Raghuram Rajan made a lot of transformational changes to the Indian banking system and the way monetary policy is conducted in the country.
Urjit Patel’s appointment as the next RBI governor signals a strong likelihood of policy continuity, Thomas Rookmaaker, director, Asia-Pacific Sovereigns Group at Fitch Ratings said in a note.
He said the positive transformation set in motion by Governor Rajan, starting with the recognition of the problems associated with both high inflation and weak bank balance sheets, is not yet complete.
“Having served as deputy governor in the past three years, Urjit Patel is well-positioned to further institutionalize these policy changes in the period ahead,” he said.
From a rating perspective, he said, policies are more important than personalities.
“A central bank governor doesn’t need to have a rock star status to be successful in reigning in inflation or cleaning up the banking sector,” he said.