Will Urjit Patel, the silent owl, do the trick?

With the weekend culture getting wider currency in India thanks to the presence of multi-national companies and the exposure of Indians to global working norms, Saturday has lost its primacy as a working day.

These days, people, particularly those who are blessed with a two-day weekend, eagerly wait for Saturdays so that they can put a lid of silence on the work tensions and start enjoying the niceties of life, for a couple of days at least.

It’s no different for the 17,000-odd people who work at the Reserve Bank of India, the country’s apex bank that follows a five-day working week. However, there have, of late, been major disturbances to their Saturday routine.

First, it was Raghuram Rajan, the incumbent RBI chief dubbed by many as ‘rock-star Rajan’ for his candid comments on everything economic and beyond, who chose a Saturday (June 18, 2016) to announce his decision not to seek extension of his tenure that would end in early September.

And again, the central government chose another Saturday (August 20, 2016) two months down the line to make the world know about the person, Urjit R Patel, who would step into Rajan’s shoes at the Mumbai’s Mint Street.

Rajan’s announcement on a silent Saturday - a regular stock market holiday - is understandable. Given his iconic status and global expertise in economics, his sudden and surprise departure from the apex bank would not have been taken lightly by the stock markets.

Moreover, Rajan had to endure periodic outbursts against his style of working from some such as Twitter tiger Subramanian Swamy, also a BJP MP in Rajya Sabha.

So, the exit was not obviously smooth. That was the reason why the central government came out with a slew of FDI reforms within a few hours of Rajan’s announcement, to ring-fence the markets from any major downswings. The efforts paid off and the markets took Rajan’s exit in their stride when they opened the following Monday.

But it’s intriguing that the Centre elevated Kenya-born Urjit Patel, presently RBI’s Deputy Governor, to the coveted position of RBI Governor on a silent Saturday. Did the government fear market volatility post the elevation? It looks like so. Otherwise, the announcement would have come out on a working day. Predictably, markets ended lower the following Monday (August 22, 2016).

Now, the muted question is whether Patel will be a silent Saturday or, like his current boss, a volatile Monday. Born on October 28, 1963 and pushing 53 now, Patel is truly a global Indian with a varied experience in India and abroad.

He was born in Kenya, did his Bachelor’s in Economics from the London School of Economics and obtained Master of Philosophy Economics degree from Oxford University in 1986 before crossing the Atlantic for his doctorate in Economics from Connecticut, US-based Yale University, which he completed in 1990.

His professional career began on a high note as he joined the International Monetary Fund (IMF) immediately after obtaining his doctorate, and continued there for five years. Patel handled the global monetary agency’s country desks in the US, Myanmar, Bahamas and also in India.

Interestingly, he was handling the IMF’s India desk when the country was busy ushering in new economic policies under the then Prime Minister P V Narasimha Rao in early 1990s.

From the IMF, he moved to the RBI as an advisor and worked on banking sector and a host of other reforms in the areas of debt market, pension funds and currency exchange rate for two years. Thereafter, he worked for the Ministry of Finance in India as a consultant till 2001.Patel was also a part of several high level committees in the central and State governments till 2004 before shifting to the private sector space.

Patel, known for his low-key working style, advised the US-based Boston Consulting Group, worked as president (Business Development) at Mukesh Ambani-owned Reliance Industries (RIL) for a couple of years, and was Executive Director of Infrastructure Development Finance Company, popular as IDFC.

He was back at the RBI when the erstwhile UPA government led by Dr Manmohan Singh appointed him as Deputy Governor on January 11, 2013 for a period of three years. The Narendra Modi-led NDA government extended his tenure and gave him secondterm earlier this before elevating him to replace Raghuram Rajan whose term as the RBI Governor ends on September 4, a Sunday.

As a deputy to Rajan, Patel has been handling the key monetary policy division that plays a vital role in the monetary policy issues, takes decisions on inflation targeting and also focuses on the way key interest rates should move.

In way, he was the backroom boy for all the major decisions that the outgoing RBI chief had taken thus far.With this rich inside experience of the RBI and the able tutelage of Rajan behind him, Patel will move into his new role as the RBI chief.

But there are challenges galore for the Gujarati-speaking man whom some describe as an introvert and say he is not always ready to mingle. The biggest challenge for him will be to push up the economic growth while reining in inflation. That’s not an easy task by any measure as Rajan, despite his global experience and exposure, could not succeed in that space.

The task of balancing growth and inflation is much harder now with the central government in consonance with the RBI, appointing MPC (Monetary Policy Committee) which will henceforth have a final say on the key interest rates – a sole preserve of the RBI Governor hitherto. The Governor does have a say, but that’s only when there is a tie among the committee’s six members (including Governor) on which way to go.

As a RBI chief, his main concern would and should be keeping inflation in control because any upward inflationary pressure will hurt the poor the most.

Whereas, for the government it is the economic growth that tops its agenda. It’s a known fact that lower interest rates are the prerequisite for higher economic growth. However, any drastic reduction in the interest rates will jack up inflationary pressures.

So, the new Governor’s success lies in balancing the growth and inflation. Cleaning up of public sector banks’ NPA (non-performing asset) mess, a politically-sensitive issue that he inherits as a legacy from Rajan, protecting the Indian economy from global headwinds and importantly, rupee stability, are the other critical issues that will test his mettle at the Mint Street.

In the monetary policy parlance, a person who keeps interest rates high is labeled as hawkish while the one who goes for low interest rates is termed as dovish. Reports emanating from the inner corridors of the RBI reveal that Patel neither wants to be dove nor hawk.

He wants to be an owl, a clever bird with sharp eyes and ears that dexterously navigates in the dark. But will his owlish actions bring more light on to the Indian economic landscape? That’s a billion dollar question and it’s too early to search for an answer to it now.

Patel should, however, be careful about certain things and should refrain himself from using quotable quotes like ‘In the land of the blind, the one-eyed man is king’ and ‘My name is and I do what I do’. Such things will certainly irk Twitter tigers like Swamy. Patel knows and we know very well what will happen!