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Q. Challenges before new RBI Governor: Discuss the challenges before new RBI Governor.
Aug 22, 2016 Related to : GS Paper-3

Ans :


Recently Central Government has announced the name of Urjit Patel as a new Governor of Reserve Bank of India. Urjit Patel will take up the top job for a three-year from 4th September. A decision to appoint Urjit Patel as Governor of RBI seems affirmation of the Centre’s commitment to ensure policy continuity at the central bank. But considering current economic conditions there are challenges exists before new RBI Governor.


  • The new RBI Governor will face the issue of changed circumstances of monetary policy formulation. Under new system the Monetary Policy Committee, the six-member panel will decide the interest rates. It will be interesting and instructive to see how he helms the committee approach to rate-setting.
  • The new Governor as the head of the banking regulator inherits the ongoing clean-up of bank balance sheets. Unclogging the credit pipeline by helping resolve the build-up of stressed assets with the country’s lenders and thereby improving monetary transmission are tasks needs to be finished.
  • Similarly investors and markets alike will be keenly watching new Governor’s approach to expediting the process, especially given past stress on fiscal restraint. Hence Governor needs to ensure confidence among investors and market players.


Urjit Patel has played key roles at multilateral lending institutions and diverse industries, ought to stand him in good stead while dealing with the complexities of regulating the markets, the financial services industry and payments systems at a time of rapid technological change and disruption. Challenges are quit common under rapidly changing circumstances, hence new governor needs to address all these issues.

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