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PROFILE-Neither hawk nor dove: RBI’s Urjit Patel gives few clues

When the Reserve Bank of India (RBI) announces its monetary policy later in the day, investors, media and government officials will all train their eyes on a man who is, by all accounts, not fond of the spotlight.


When the Reserve Bank of India (RBI) announces its monetary policy later in the day, investors, media and government officials will all train their eyes on a man who is, by all accounts, not fond of the spotlight.
New governor Urjit Patel is a study in contrasts with his predecessor, Raghuram Rajan, who spoke out clearly, well and often, sometimes on issues seen as beyond his remit.

While Patel is also seen as cerebral, Rajan was widely regarded as one of the world’s few rock star central bankers, famed in a previous life for predicting the 2008 financial crisis.

Patel’s biggest achievement at the RBI before becoming governor was suggesting the monetary policy framework the bank has adopted, and he will be the first governor to oversee interest rate decisions by a monetary policy committee (MPC), a six-member panel that he chairs. The 53-year-old was Rajan’s deputy when his boss ran into rough weather with the Bharatiya Janata Party-led government.

Many say the BJP did little to shield Rajan from personal attacks after he spoke out on issues like intolerance and refused to take its cues to cut rates. If Patel needed any salutary warnings to stick to the knitting, he would have picked them up as an observer. It took a rare flash of verbal gymnastics from the Kenyan-born bachelor for RBI-watchers to get an idea of how he sees himself: “Neither hawk nor dove, but owl. The owl is traditionally a symbol of wisdom.

We are vigilant when others are resting.” This avian analogy hints at a departure from Rajan’s hawkish stance on inflation, and is likely to be music to the ears of a government looking to spur growth. But there are few other clues, for instance, from his family background. He traces his roots to Palana village in Gujarat’s Kheda district, the same place where the family of an earlier RBI governor, IG Patel, hailed from.

His grandfather migrated from central Gujarat in the early years of the 20th century to Kenya, and his father, who died a few years ago, was a successful entrepreneur in Nairobi. Patel stays with his mother in Mumbai. His name was considered as the first BRICS Bank chief, but Patel is learnt to have declined as he did not want to leave her and relocate to Shanghai. Apart from core policy and regulatory issues, Patel’s biggest challenge will be to fiercely protect RBI’s autonomy.

Analysts will watch for cues in his public speeches and interactions. His ability to withstand mounting political pressure that is a central banker’s lot will be measured on the same scale as that used for Rajan and Duvvuri Subba Rao, who had a famously rocky relationship with the UPA government.

 Patel holds a PhD from Yale University and has worked at the International Monetary Fund (IMF), The Brookings Institution at Washington and the Massachusetts-based Boston Consulting Group. He became deputy governor in January 2013.

Read more at: http://www.moneycontrol.com/news/economy/profile-neither-hawk-nor-dove-rbi%E2%80%99s-urjit-patel-gives-few-clues_7568161.html?utm_source=ref_article