Dr Patel checks in at RBI to complete Rajan’s ‘deep surgery’

Mumbai, Sep 4 (PTI) Urjit Patel, the new Governor of RBIwho has maintained a contrasting low-profile to outspoken androckstar-like Raghuram Rajan, has his immediate task cut out– finishing the ‘unfinished agenda’ of his predecessor oncompleting ‘deep surgery’ of banks and winning the war oninflation. Incidentally, it was Patel — often referred to as ‘DrPatel’ by Rajan — who scripted a new framework for fightingprice rise, which earned him the informal title of ‘inflationwarrior’. However, it is the ‘deep surgery’ ordered by Rajan tocleanse the balance sheets of the banks from bad loans thatmay pose greater challenges for Patel, as a number of banks,corporates and others have been lobbying hard against whatthey call the ‘unwarranted urgency’ shown by the RBI in thisregard at the cost of hurting investment climate. Unlike Rajan, who took charge at a time when globalmarkets were volatile and concerns were being raised about therupee, the Gujarati-origin and once Kenyan citizen Patel hascome in when financial markets are much more stable andconcerns have also subsided about any potential dollar flightdue to impending redemption of NRI bonds. 52-year-old Patel’s appointment as the 24th RBI Governoris effective today, though his first working day could beSeptember 6, due to today being a Sunday and tomorrow being aholiday for Ganesh Chaturthi. A number of corporate leaders and bankers who havepreviously worked with Patel, including during his tenure asRBI’s Deputy Governor and earlier on boards of some companies,said he is expected to show "much better understanding" of theproblems the companies and banks are facing due to the centralbank’s AQR (Asset Quality Review) directive. Some are even hopeful that the AQR regime may actually seesome change, though Rajan kept on repeatedly saying in hislast days at RBI that the process should be completed by March2017, a target he had set for cleaning up of the banks’balance sheets. With public sector banks accounting for a large portion ofthe bad loans, the clean-up exercise has raised heckles ofmany in the government as well, though not many have beenpublic with their views, fearing adverse commentary. MORE PTIBJABM