Sanjay Malhotra, the next Reserve Bank of India governor, will face a host of challenges as he gears the central bank to balance inflation objectives and slowing economic growth, while expanding on his predecessor's role of financialisation and cleanup of bad debt.
"His first challenge will be to keep inflation at bay and also provide growth impulses for the economy," Deepali Pant Joshi, former executive director at the RBI, told NDTV Profit on Thursday. "He will also look at corporate resolutions and resolve roadblocks in IBC (Insolvency and Bankruptcy Code)."
Joshi expects new initiatives from Malhotra for digital financial inclusion, given his technocratic background and academia from IIT Kanpur, and level up the so-called 'JAM Trinity' of Jan Dhan, Aadhaar and mobile banking to advance the RBI's push for financialisation within the population.
"He will have to go much beyond Jan Dhan, Aadhaar and mobile and help create a suite of products which will graduate poor people through savings, credit and investment products," Joshi added.
The revenue secretary, a 1990-batch Indian Administrative Service officer from the Rajasthan cadre, is an engineering graduate in Computer Science from the Indian Institute of Technology, Kanpur, and holds a Master's in Public Policy from Princeton University, US.
DK Mittal, former banking secretary, said the new RBI governor has to address the cost of doing business for non-banking financial companies, which have been under the central bank's scanner since the IL&FS trouble. "It requires a fresh look. The issue of simplification of processes is critical," he said.
Commenting on the Modi government's decision to tap a bureaucrat again for the RBI governor role, Mittal said it helps having a former public servant in the role to coordinate with the government.
"We should trust the government that they have made the right decision. The access to government becomes deeper if (RBI Governor) is from government," Mittal added.
Joshi praised outgoing governor Shaktikanta Das for his six-year stint at the RBI, saying he balanced regulation with innovation. "He was very open to industry veterans... He won the central banker of the year award for two consecutive years."
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