The government on Tuesday appointed Shaktikanta Das, member of the fifteenth finance commission, as the governor of the Reserve Bank of India (RBI), a day after Urjit Patel resigned at the end of a bruising tussle with the government over the regulator’s independence and the regulation of banks.
Shaktikant Das, who was secretary in the department of economic affairs when Prime Minister Narendra Modi announced the controversial high-value currency ban in November 2016, has the immediate task of normalizing RBI’s relations with the government and reassuring the financial markets about the direction of the central bank’s policies. The last thing the government wants at this juncture is a sell-off in the rupee, after having taken a series of fiscal measures, including raising import tariffs on certain goods, to try and arrest the domestic currency’s recent depreciation. The rupee ended 53 paise lower at 71.87 against the US dollar on Tuesday, recovering from an intraday fall of 110 paise.
The appointments committee of the cabinet cleared Das’s appointment for a period of three years, said an official order issued by the department of personnel and training.
Another key challenge for Das is to win over the support of RBI executives, especially deputy governor Viral Acharya, who may still be smarting from government interference and Patel’s exit.