Urjit Patel completes one year in office as governor of RBI

Urjit Patel has completed one year as the 24th governor of India’s central bank, Reserve Bank of India (RBI), on Monday. It is observed that the RBI has displayed the most stable performance in its history during Urjit Patel’s tenure. In October 2016, the RBI unanimously decided to reduce the repo rate by 25 basis points to 6.25% from 6.5%. In the next four bi-monthly monetary policies of December 2016, February 2017, April 2017 and June 2017, the repo rate was kept unchanged at 6.25%. 
 
In the latest bi-monthly monetary policy declared in August 2017, the RBI decided to cut the repo rate by 25 basis points from 6.25% to 6%. The rupee was supposed to face a bigger challenge after Donald Trump’s victory in early 2017. Urjit Patel managed the currency market well, resulting in a rupee appreciation by around 5.5% in the year 2017. Patel has successfully led the Monetary Policy Committee, formed in 2016, to bring transparency and accountability in fixing India’s monetary policy. Earlier, the key decisions related to the benchmark interest rates used to be taken by the RBI alone. 
 
Demonetisation had presented a big challenge to the governor. It was a decision solely taken by the government, but the RBI had to take most of the blame for the inconvenience caused to the people. Redemption of foreign currency non-resident deposits was termed as one of the first biggest challenges in front of Urjit Patel after becoming the governor of the RBI. However, no ripples were witnessed from the USD 25 billion FCNR redemption. Currently, Urjit Patel has to face the bigger problem of non-performing assets (NPAs).