Indis appoints Urjit Patel (extreme left) as India's new RBI governor

There is nothing accidental about the rise of quietly driven economist Urjit R Patel. As deputy governor in charge of monetary policy at the Reserve Bank of India, Patel, 52, was a front runner for the central bank's top post. The Indian government announced on Saturday that Patel will lead the Reserve Bank of India for three years starting on September 4.

The business community rapturously received the Yale-educated economist's appointment as Patel had widely been seen as ensuring the most continuity among the candidates believed to be in the running to be the next governor.

"He has the right experience and knowledge of the inner workings of monetary policy, which is a sign India's central bank will continue with the balanced policies started by his predecessor," said Adam Langley, a senior economist with a U.S boutique bank.

Patel will replace Raghuram Rajan, a University of Chicago finance professor and former chief economist at the International Monetary Fund, who stunned financial markets in June by announcing he would step down in September and return to academia after a single term at the RBI. No RBI governor has only been given a three-year term since 1992, so Rajan's early exit sparked a media firestorm trying to figure out why this happened.

A public intellectual in his own right, Rajan had things to say on a wide variety of issues, and from the looks of it, some of them didn't go down well with members of the ruling Bharatiya Janata Party (BJP), which criticized Rajan for some of his comments on economic matters.

Urjit Patel: India's New RBI Governor

Patel has run the Reserve Bank of India's monetary policy department since 2013, and is seen as a close lieutenant to Rajan. He will now get to implement the policies he had helped shape.

Patel headed a panel that recommended landmark changes to monetary policy in India, including a switch to inflation-targeting and the creation of a panel to set interest rates.

The Indian government is soon expected to announce the composition of a six-member monetary policy committee to decide on interest rates. It will be made up of Patel and two other RBI officials, along with three members appointed by the government.

Patel will take over as India’s central bank addresses bad bank loans, and threats to global growth.
 

Education Dividend

Like Rajan, Patel has a doctorate in economics from Yale University and considerable international experience on his resume. Patel is the very model of a cosmopolitan Indian and has the intellectual pedigree for an itinerant world. Patel holds a Doctorate (Ph.D) in Economics from Yale University and is a graduate of the University of London and Oxford.

In 1986, he received a M Phil. degree in Economics from Oxford University and a B.Sc. in Economics from the University of London in 1984.

Patel was a fellow at the Brookings Institution in the U.S and his research focused on economics and public finance in India, international trade, financial intermediation and regulation of infrastructure utilities. Patel has also worked with the IMF between 1990 and 1995 covering the US, India, Bahamas and Myanmar desks. He has worked in energy and infrastructure at Boston Consulting Group, and with India's Reliance Industries. Patel's experience lends itself to India’s infrastructure reform agenda.

Aside from his main priority of controlling inflation, Patel will have to follow through on efforts to clean-up banks' bad loans so that they can once again support the investments needed if India is to keep its place as one of the world's fastest growing economies.