Raghuram Govind Rajan - Hearthrob of the banking industry

With Raghuram Rajan declaring to leave his current post and moving back to academia, it is now time to understand and know about the person who gave a financial edge to the much needed banking reforms in India.

Raghuram Govind Rajan still serving as the 23rd Governor of Reserve Bank of India (RBI) is the youngest governor RBI has seen till date.

Before Rajan joined the Indian currency was unstable, inflation was high, and growth was weak. Rajan has been depicted as a James Bond and called a "rock-star" economist, "That his chiselled features are as sharp as his brain add to his current status as the Poster Boy of Banking," wrote political author Shobhaa De in a column.


  1. An IIT' ian Delhi from the 1985th batch, he did his MBA from IIM Ahmedabad in 1987

  2. Recieved PhD degree in finance from MIT for a thesis paper named "Essays on banking" in 1991 and then joined the Booth School of Business at University of Chicago as a professor of Finance

  3. Received the Fischer Black Prize for his theory and practices of finance

  4. Got interviewed for the Oscar-winning documentary Inside Job (2010) for his views on the Credit crises 2008

  5. Rajan won the Financial Times/Goldman Sachs Business Book of the Year award in 2010 for his book, Fault Lines: How Hidden Fractures Still Threaten the World Economy

  6. 2016 - 100 most influential people in the world - TIME Magazine

  7. Recognized as the best central bank governors across the globe


  • 2003 - 2006
  • Chief Economist at the International Monetory Fund (IMF)
  • 2008
  • Appointed as an Economic Advisor
  • 2011
  • Was the President of the American Finance Association
  • 2012
  • Appointed as chief economic adviser to India's Ministry of Finance
  • 2013
  • Became the 23rd Governor of the Reserve Bank of India


  • Introduced the Unified Payments Interface, an application once downloaded reduces the cost and time taken for making simple payments for any transaction below Rs 1 lakh to something as low as Rs 50

  • He successfully brought down retail inflation to 3.78% in July 2015 from 9.8% in September 2013

  • Wholesale inflation was down to a historic low of -4.05% in July 2015 from 6.1% in September 2013

  • India's forex reserve is now stronger and the central bank has forex reserves to the tune of $386 billion

  • RBI granted approval to 11 entities, to set up payments banks and proposed such licences in future. Two universal banks have been licensed and eleven payment banks have been given the nod. This move is to extend banking services to the nearly two-thirds of the population who are still deprived of banking facilities

  • RBI has instructed all the banks to disclose all non-performing assets (NPAs) by March, 2017 and the banks have reported massive jump in the bad loans in the last two quarters. Rajan forced banks to aggressively recognize bad loans by asking them to not treat restructured loans as performing assets

What went wrong?

  • Mr. Swamy said last month that Mr. Rajan's policy decisions had led to "the collapse of industry and rise of unemployment"

  • He said "He has hiked interest rates in the garb of controlling inflation that has damaged the country… (his actions) led to collapse of industry and rise of unemployment in the economy… The sooner he is sent back to Chicago, the better it would be"

  • The running government and Rajan have both not been able to agree over interest rates policies, with the governor keenly focused on reining in inflation while the Modi government sought faster economic growth

Unfinished Work

  • The bank clean-up isn't finished, though measures taken so far had brought more credibility to bank balance sheets

  • The monetary policy committee that will set policy has yet to be formed

Corporate Views

"India was lucky to have had the services of an outstanding economist like Rajan as the Governor of RBI. His performance was acclaimed not just in India but throughout the world," Infosys co-founder NR Narayana Murthy

State Bank of India (SBI) chairman Arundhati Bhattacharya said, "Dr. Rajan is a person of very high caliber, who has built ably on the reputation of our Central Bank and given it a very large measure of credibility."

Nobel laureate economist Amartya Sen said, "It is unfortunate if Rajan's exit is because some government member is against him. His exit is a huge loss."

Mahindra & Mahindra Ltd. Chairman Anand Mahindra, said "In my travels around the world and encounters with leading overseas businessmen it became clear that during his tenure he greatly enhanced the credibility and bankability of India. I trust that a successor will be found who will continue and enhance the great work done by Governor Rajan."

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