On December 10, 2024, Shaktikanta Das concluded his six-year tenure as the 25th Governor of the Reserve Bank of India (RBI), marking one of the longest-serving periods in the institution’s recent history.
Appointed on December 12, 2018, following the resignation of Urjit Patel, Das’s leadership has been pivotal during significant economic events.
Tenure Highlights
Throughout his term, Das navigated the Indian economy through various challenges, including the COVID-19 pandemic, fluctuating inflation rates, and global financial uncertainties.
His policies aimed at maintaining economic stability and fostering growth. Under his guidance, the RBI implemented measures to support the financial sector and ensure liquidity during tumultuous periods.
Transition of Leadership
Succeeding Das is Sanjay Malhotra, a 1990-batch Indian Administrative Service (IAS) officer from the Rajasthan cadre.
Prior to this appointment, Malhotra served as the Revenue Secretary of India and has held significant positions such as the Financial Services Secretary and Chairman and Managing Director of Rural Electrification Corporation (REC) Ltd. His extensive experience in finance and administration positions him as a capable leader for the RBI.
Farewell Message
In his farewell address, Das expressed profound gratitude to Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman for their unwavering support.
He acknowledged the collaborative efforts that facilitated effective fiscal-monetary coordination, which was instrumental in addressing multiple challenges over the past six years.
Das also extended his appreciation to stakeholders across the financial sector, including experts, economists, industry bodies, and the entire RBI team, emphasizing the collective success in navigating unprecedented global shocks.
Impact on Financial Markets
The transition in leadership has influenced market sentiments. The Indian rupee is projected to reach an all-time low, with expectations of interest rate cuts under Malhotra’s leadership.
The 1-month non-deliverable forward indicates the rupee opening at approximately 84.80-84.82 against the U.S. dollar, surpassing its previous low of 84.7575.
Analysts anticipate the rupee could weaken further, potentially reaching 85.50 by the end of December 2025. Despite these projections, the RBI is expected to continue intervening to manage market volatility.
Historical Context of RBI Governors
Shaktikanta Das’s six-year tenure stands out in the RBI’s history. The table below provides an overview of recent RBI Governors and their tenures:
| Governor | Term Start | Term End | Duration |
|---|---|---|---|
| Raghuram Rajan | 4 Sep 2013 | 4 Sep 2016 | 3 years |
| Urjit Patel | 4 Sep 2016 | 10 Dec 2018 | 2 years, 3 months |
| Shaktikanta Das | 12 Dec 2018 | 10 Dec 2024 | 6 years |
| Sanjay Malhotra | 11 Dec 2024 | Incumbent | – |
Looking Ahead
As Sanjay Malhotra assumes the role of the 26th RBI Governor, the financial sector anticipates his approach to monetary policy, especially concerning interest rates and inflation control. His extensive background in financial services and administration is expected to guide the RBI through forthcoming economic challenges, ensuring stability and growth.
Who succeeded Shaktikanta Das as the RBI Governor?
Sanjay Malhotra, a 1990-batch IAS officer from the Rajasthan cadre, succeeded Shaktikanta Das as the 26th Governor of the Reserve Bank of India.
What were the significant challenges during Shaktikanta Das’s tenure?
Das’s tenure encompassed challenges such as the COVID-19 pandemic, fluctuating inflation rates, and global financial uncertainties.
What is the expected impact of the new RBI Governor on interest rates?
Market expectations suggest potential interest rate cuts under Sanjay Malhotra’s leadership, aiming to stimulate economic growth.
