Sanjay Malhotra Governor, Reserve Bank of India
“As we have to be conscious of the fact that we do maintain continuity and stability, we cannot be stuck to it, and we have to be alert and agile to meet challenges,” Malhotra said in his first interaction as Governor with media
Mumbai: Sanjay Malhotra took charge as the 26th Governor of Reserve Bank of India on Wednesday, and promised to focus on deepening trust, growth and ensuring stability.
Malhotra, 56, takes over as the central bank governor at a critical time where inflation has shot above the comfort level, growth has declined to a 7-quarter low and rupee is at all-time low level against US dollar.
“I can assure that we will put in the best foot forward in public interest to deliver what the public of India looks forward to, which is trust, which is growth and which is a stable and certain policy,” he told reporters at his maiden interaction as a RBI Governor.
Resorting to cricket analogies a favourite with his predecessor Das, Malhotra said he cannot start playing his shots on day one itself.
The next monetary policy review is scheduled for the first week of February, offering Malhotra nearly two months of time before he makes his maiden decision on interest rate and other important issues.
Malhotra said the central bank will maintain continuity an stability in policy matters, but emphasised on the need to remain “alert and agile” in the wake of the current global economic and political environment.
Earlier in the day, he took charge as the 26th Governor of the Reserve Bank, replacing Shaktikanta Das who demitted office after six years.
“As we have to be conscious of the fact that we do maintain continuity and stability, we cannot be stuck to it, and we have to be alert and agile to meet challenges,” Malhotra said in his first interaction as Governor with media.
In his brief statement, Malhotra also stressed that the central bank will continue to interact with all segments, including financial regulators, state governments and the Centre, to continue the Reserve Bank’s legacy.
Malhotra said, “We are in a very dynamic world right now fraught with geopolitical tensions, climate change risks and political uncertainties”, and affirmed that the RBI will remain “alert and agile” to meet the challenges.
RBI is a prestigious institution which has done commendable work over its history courtesy the diligence and hard work of its staff members and senior officials, said Malhotra, specifically mentioning his predecessor Shaktikanta Das’ name.
“I will continue to uphold the legacy (of the RBI) and take it forward,” he affirmed, outlining his thoughts on the key focus areas.
On growth, he said it is a “huge responsibility” to ensure that the expansion in economic activity continues.
Although there was no explicit mention of inflation in his remarks, Malhotra stressed that the focus will be on “stability” and “trust”.
Policy certainty can be among the factors which can ensure stability, Malhotra said, adding that in his earlier assignment as the Revenue Secretary he focus was on stability in policy.
As an institution, he said, the RBI is what it is because of the “trust” it has earned for working with the public’s interest in mind, and added that it would be his endeavour to strengthen it.
Whatever decisions are taken will be done with public interest in mind, Malhotra said. He, however, declined to take any specific questions from the media.
“We do not have monopoly of all knowledge,” he said, while stressing on the importance of wide consultations with other stakholders.
The former revenue secretary emphasised that RBI will extensively use technology to further promote financial inclusion adding that financial inclusion would be an important area for him, despite the successes achieved in the past.
RBI will collaborate with all stakeholders, including financial regulators, state governments and the Centre to deepen the benefits of financial inclusion, he said.
Malhotra, a career bureaucrat, arrived at the central bank’s headquarter this morning, where he was welcomed by senior RBI staffers.
Malhotra, who recently served as the revenue secretary with ministry of finance, signed the documents to take the charge of the important institution that performs a variety of roles.
Malhotra, an IAS officer of the Rajasthan cadre comes at the helm of RBI at a very critical juncture, where growth and inflation balance has “unsettled” as per his predecessor Shaktikanta Das.
GDP Growth declined to a seven-quarter low of 5.4 per cent in the September quarter while the October headline inflation was above the 6 per cent mark set for the central bank by the government.
Analysts are expecting the RBI to cut interest rates at the forthcoming policy review in February, and are of the opinion that Malhotra’s appointment “cements” the possibility.
Under Das, the Reserve Bank maintained a status quo on key rates for 11 consecutive meetings over nearly two years as it prioritised to tame inflation. It also diagnosed the slow growth as a result of high inflation.