After Raghuram’s Rajan Raaga, it’s Urjit’s Patel Rap at RBI

Mumbai, Aug 21 (PTI) As the Mint Street readies for a newsheriff, industry and markets want much more than a change inthe quintessential signature on currency notes when asoft-spoken but effective Urjit Patel takes over from anoutspoken and rockstar-like Raghuram Rajan. "Figuratively and symbolically, the change in personalitythat Patel brings in to the top job at RBI appears to be verycomforting to the industry and bankers who were often at thereceiving end of the barbs, mostly in form of policy actions,from Rajan," a veteran banker said. While everyone has been effusive in showering praise onPatel being chosen to succeed Rajan, many industry leaders,top bankers and influential marketmen said they are alsokeeping their fingers crossed on whether Patel will continueas the ‘inflation warrior’ he was for his current Governor orhis corporate and finance background would help taper downRBI’s "hawk-eye fixation" on checking inflation and the ‘deepsurgery’ to remove bad loans. The wish list that ‘Dr Patel’, as he is commonly referredto as, faces is long and could be difficult to fulfil on manyfronts — lower the rates, go easy on banks and borrowers, beliberal with grant of banking licences, safeguard foreignreserves and rather beef it up. Ironically, Patel himself was the "Brahmastra or themaster tool", as described by a top functionary at an informalindustry gathering here, that Rajan used in his battlefield– where RBI is required to control inflation without hurtinggrowth while also catering to unending demands for rate cuts,and also clean up books of the banks from bad loans includingthose induced upon them. The top functionary also told the industrialists andbankers present there that Rajan had been rooting for Patel ashis successor as RBI Governor, presumably to ensure that hislegacy continues and a continuity ensues in the monetarypolicy — an idea which also gained currency with thegovernment which did not want any further negative publicityor any adverse impact on currency, bonds and stock markets. "This was also precisely the reason, why the governmentdecided to make the announcement of Patel’s appointment on aSaturday — that is to ensure that the markets do not see anyknee jerk reaction and influential marketmen and banks areasked to ensure availability of sufficient liquidity ofsecurities as well as cash," a high-level source said. MorePTI BJMKJ