23rd RBI governor Mr. Raghuram rajan's sudden exit. Reasons,Effects on India etc..

1. Raghuram rajan and India
By – Pranav Gothoskar

2. Who is Raghuram Rajan?
23rd governor of Reserve Bank of India.
Chief economic adviser to India’s Ministry of
Finance.
Chief economist at International Monetary Fund.
He was a gold medalist at both IIT and IIM.
He won the Fisher Black Prize awarded by the
American Finance Association.
Raghuram Govinda Rajan is one of the Top 10
Economists of the world In 2003.

3. lWhat Raghuram Rajan Did as a Governor
l (source- Kotak securities & Indianexpress)

4. Rajan’s most visible achievement during his term as the RBI governor is reigning in inflation.
#1

5. His term saw two repo rate increases which totaled to 50 basis points. This helped inflation to
drop from 11.5% at its peak to 3.3% in November 2014.
#2

6. Then came by, five repo rate cuts aggregating to 150 basis points. He left rates unchanged at
6.5% at Tuesday’s meeting.
#3

7. Rajan initiated Swachh bank exercise – clean-up of the bad loans in the banking sector,
particularly public sector banks.
#4

8. He made way for the banking structure reforms by allowing entry of small finance banks &
payments banks.
#5

9. As he leaves, he could be the last RBI governor to have decided on monetary policy. Henceforth,
policy decisions will be vote-driven rather than being directed only by the governor.
#6

10. RBI will set a formal inflation target with a casting vote for the governor in the forthcoming policy
reviews.
#7

11. Why Raghuram Rajan is Stepping Down?
> Governor Rajan’s monetary policy view
> Conflict with fiscal authorities
> Erosion to RBI’s policy independence
> Central bank policy independence

12. Impact of Raghuram Rajan's Exit
Currency Outflow
Change in Inflation
Change In RBI's Policies
Change in Interest Rates