M. Rajeshwar Rao to Lead RBI’s Monetary Policy Department

The Reserve Bank of India (RBI) has appointed Deputy Governor M. Rajeshwar Rao to oversee the Monetary Policy and Economic Research Departments, following the completion of Deputy Governor Michael Patra’s term on January 15, 2025.

Transition in Leadership

Michael Patra, who served as Deputy Governor since 2020, concluded his tenure after two one-year extensions. During his term, he managed key areas including the Monetary Policy and Financial Market Operations Departments. With his departure, the RBI has reassigned his responsibilities among the current deputy governors.

M. Rajeshwar Rao’s Expanded Role

M. Rajeshwar Rao, a seasoned central banker with a career spanning over four decades since joining the RBI in 1984, has been entrusted with the Monetary Policy and Economic Research Departments. Prior to this, Rao managed departments such as Regulation, Risk Monitoring, Communication, Enforcement, and Legal. His extensive experience includes roles as Executive Director and Chief General Manager, overseeing various critical functions within the RBI.

Interim Participation in Monetary Policy Committee

In his new capacity, Rao will temporarily join the Monetary Policy Committee (MPC) and is expected to participate in the upcoming policy meeting in February 2025. This interim arrangement will continue until a permanent successor to Michael Patra is appointed.

Recent Tenure Extension

In October 2024, the Indian government extended Rao’s tenure as Deputy Governor by one year, effective from October 9, 2024, or until further orders. This extension ensures continuity in leadership within the RBI during this transitional period.

Implications for RBI’s Policy Direction

The reassignment of portfolios among the deputy governors comes at a critical time for India’s economy, with the RBI navigating challenges such as inflation control and economic growth. Rao’s leadership in the Monetary Policy Department is anticipated to play a pivotal role in shaping the central bank’s policy decisions in the near future.

Summary of the news