Central Banking publication names Shaktikanta Das governor of the year

It says Das faced many challenges; he was a 'voice of calm' amid Covid-19 crisis

Reserve Bank of India’s Shaktikanta Das has been awarded the title of Governor of the Year by financial publisher 'Central Banking', which lauded him for critical reforms and overseeing payments innovation.

“…Das has defended reform progress and driven it further himself. He shepherded the bankruptcy code back into legality after the Supreme Court overturned the previous version. He pushed banks to raise more capital, restructured the RBI to create a stand-alone supervision department, and established a College of Supervisors to train the next generation,” the staff of Central Banking wrote.

Former RBI governor Raghuram Rajan was awarded the title in 2015. Central Banking Publications specialises in public policy and financial markets. Its advisory board includes former governors in central banks in Asia, Europe, and the Americas.

Starting with the collapse of IL&FS in 2018, Das’ tenure at the RBI has been marked by a series of challenges, Central Banking staff wrote. The challenges include the Covid-19 crisis, the Russian invasion of Ukraine and new concerns over risk exposures and potential contagion risks linked to public sector banks’ loans to the Adani Group.

“It was in managing [the Covid] crisis that Das had perhaps his greatest impact, appearing as a voice of calm amid the fear, and steering the RBI deftly between intense political pressures on one side and economic disaster on the other,” the Central Banking staff wrote.

The publication saidthat under Das, the RBI had inserted ‘sunset clauses’ for most of the central bank’s interventions, some of which were attempted for the first time in India.

In response to the Covid-19 crisis, the RBI had slashed interest rates to record lows, infused large amounts of liquidity in the banking system—including through an unprecedented programme of buying government bonds—and given banks some leeway in restructuring bad loans.

“The feared surge in NPAs due to the pandemic never materialised, and India enjoyed one of the fastest recoveries of any country worldwide,” the publication said, referring to non-performing assets.

“Das was forced to steer close to the wind in co-operating with a government that has frequently put the RBI under pressure to offer more forbearance than might be wise. But most observers think he got the balance broadly right,” it said.