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Business News/ News / India/  Shaktikanta Das's 3 key policies that won him ‘Governor of the Year’ award in 2023
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Shaktikanta Das's 3 key policies that won him ‘Governor of the Year’ award in 2023

Das faced challenges as RBI Governor, including a major non-bank firm's collapse, COVID pandemic, Ukraine war
  • Nonetheless, he maintained financial stability in India
  • BI Governor Shaktikanta Das, earlier this week, was awarded the 'Governor of the Year' award for 2023Premium
    BI Governor Shaktikanta Das, earlier this week, was awarded the 'Governor of the Year' award for 2023

    In a big milestone for India, RBI Governor Shaktikanta Das, earlier this week, was awarded the 'Governor of the Year' award for 2023 by the international publication Central Banking. Former governor Raghuram Rajan was the first to be conferred the title back in 2015 from the country.

    Since taking charge, Das faced a series of challenges during his tenure, including the collapse of a major non-bank firm, the Covid-19 pandemic, Russia's invasion of Ukraine and its inflationary impact, and concerns about potential contagion risks linked to public sector bank loans. Despite the challenge, Das's leadership was crucial in maintaining the stability of India's financial sector. Here's a look at a few of his key policies which have been much applauded. 

    ILFS collapse and liquidity crisis

    The Indian financial sector faced significant challenges in recent years, including the collapse of major non-bank financial company IL&FS and subsequent liquidity issues. However, under the leadership of Reserve Bank of India Governor Shaktikanta Das, progress has been made in addressing these problems. 

    Das implemented measures such as a revised bankruptcy code and liquidity rules for non-banks, and drove improvements in the banking sector, including a reduction in gross NPAs at public-sector banks from 15% in 2018 to 6.5% in September 2022. 

    Although challenges remain, such as the government's control over key regulatory decisions on PSBs, analysts believe that an imminent crisis is unlikely and ongoing clean-up efforts may bode well for the sector. The RBI has also taken steps to demand higher standards of governance and risk management from financial firms, including PSBs, leading to improvements. 

    Covid crisis

    The impact of Covid on India and the RBI's response under Governor Shaktikanta Das. Despite intense political pressure, Das managed the crisis by creating a bio bubble and implementing policies with sunset clauses, such as the government securities acquisition program. 

    The RBI used its reserves to cushion the impact of major shocks and prevent disorderly market conditions. While navigating a sometimes contentious relationship with the government, Das maintained a pragmatic and communicative approach, allowing for direct press briefings and a public awareness campaign. 

    The RBI's response resulted in one of the fastest recoveries worldwide.

    Payment solution

    The Indian government's implementation of Aadhaar and basic bank accounts, alongside the success of the RBI's Unified Payments Interface (UPI), has led to a revolutionary growth in electronic payments in India. UPI has enabled instant electronic payments to millions of people, making it one of the world's most advanced payment platforms. 

    India now holds nearly 50 billion real-time transactions, with ACI dubbing it the world's largest real-time payments market. 

    Moreover, under Das's leadership, RBI has also overseen the upgrade of India's real-time gross settlement system, as well as trials for central bank digital currency (CBDC), while maintaining a cautious approach to crypto assets.

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    Published: 18 Mar 2023, 06:51 PM IST
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