RBI invites applications for deputy governor’s post with Michael Patra set to step down in January

  • The news comes after the government decided not to extend Patra's term for another year.

Gopika Gopakumar
Published4 Nov 2024, 11:26 AM IST
Patra handles the crucial monetary policy and economic research departments, among others. Photo: Reuters
Patra handles the crucial monetary policy and economic research departments, among others. Photo: Reuters

Michael Debabrata Patra, the career central banker who helped usher in the Monetary Policy Committee (MPC) and served as its member since inception steps down as deputy governor in January, leaving an illustrious career at the Reserve Bank of India (RBI).

On Monday, the RBI invited applications for a new deputy governor for three years, without indicating the role. Patra, who headed monetary policy at the central bank, is currently on his second extension.

The RBI is looking for candidates with at least 25 years of experience in public administration, and at the level of secretary or equivalent in the government. Candidates with 25 years of experience in an Indian or international public financial institution, or with an exceptional track record at the national or international level in relevant fields may also apply, an RBI advertisement added.

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Patra's exit comes at a time the MPC has been reconstituted with the appointment of three new external members. Market participants believe that Patra's exit is an indication that Governor Shaktikanta Das may get an extension as other members are all recently appointed.

Patra, the deputy governor with a sense of humour and a distinctive ponytail, was a key member of the Urjit Patel committee that birthed India's inflation targeting framework, and the committee-based approach to policy-making.

In that sense, he is the last of the original members of MPC from 2016 when it was constituted.

Experts believe that it may not be easy to replace Patra, who with his institutional memory, has ensured a smooth transition from a governor-driven monetary policy to a panel-based process.

He has been the only constant on the rate-setting panel, which has seen two RBI governors—Urjit Patel and Shaktikanta Das—and six external members.

The market also praises Patra's adept handling of monetary policy and liquidity during the covid pandemic, with the introduction of long-term repo operations (LTRO) and targeted long-term repo operations (TLTRO) to provide long term liquidity to entities and sectors facing liquidity pressures.

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That said, his critics say that there was a lack of consistency. Initially, he was seen as a hawk with a blinkered view on inflation and voting against rate cuts. In August 2017, he dissented with the rest and voted against a rate cut. Further in February 2018 and April 2018, he voted for a 25 basis points hike when other members voted for status quo. But he was seen to have softened his stance on inflation since December 2018 when Shaktikanta Das took over as RBI governor.

Patra was known for his humour and cryptic answers during the policy press conferences. In one of his speeches in November 2022, Patra joked that monetary policymakers were created to make weather forecasters look good. "In fact, it is said that monetary policymakers do have a sense of humour—that is why they put a decimal point on their forecasts," he said.

He was first appointed deputy governor of the RBI in January 2020. Before that he served as executive director of the RBI, responsible for the monetary policy committee, among other things. He has also worked in the International Monetary Fund as senior adviser to the executive director (India) from December 2008 to June 2012, through the global financial crisis and the ongoing euro area sovereign debt crisis

Last month, the government extended RBI deputy governor Rajeshwar Rao's term for another year, the second such extension after his original term ended in October 2023. The RBI has four deputy governors. Two are promoted from within, while the other two are typically a commercial banker and an economist.

Also read | Mint Quick Edit: RBI has served NBFCs a timely warning

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First Published:4 Nov 2024, 11:26 AM IST
Business NewsNewsIndiaRBI invites applications for deputy governor’s post with Michael Patra set to step down in January

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