Urjit Patel, ex-RBI Governor, gets govt's nod to take the role of IMF executive director

The Centre has approved the appointment of former Reserve Bank of India governor Dr Urjit Patel, one of the main architects of India’s inflation-targeting framework for monetary policy, as the Executive Director (ED) at the International Monetary Fund, for a period of three years.

This marks a return to the institution where Patel, a Kenyan-born Indian economist, began his career more than three decades ago. He worked at the International Monetary Fund for five years, first in Washington DC then came to India in 1992 as the IMF’s deputy resident representative in New Delhi.

The appointment by government comes after the unexpected termination of the services of Krishnamurthy V Subramanian as executive director, India, at the International Monetary Fund (IMF), cutting short his term by about six months in an order dated April 30.


Read more: Urjit Patel's career journey comes a full circle: From IMF economist to executive director via Reliance & Mint Street

Patel's tenure as RBI governor
Patel took over as the 24th governor of the RBI in 2016, succeeding Raghuram Rajan. In 2018, he became the first RBI governor to resign due to personal reasons and held the post for the shortest term since 1992. The resignation came after a prolonged public spat between the RBI and Prime Minister Narendra Modi's government. Prior to that, he served as a deputy governor of the central bank handling monetary policy, economic policy research, statistics and information management, deposit insurance, communication and Right to Information.

Building up to his abrupt departure from the top post, Patel differed with the government on various issues like its intervention in central bank's autonomy, capital transfer to government and the dual regulation of public and private sector banks among others.

Their differences came to a head when then RBI deputy governor Viral Acharya warned that compromising the central bank’s independence could be “catastrophic". The public spat was followed by then finance minister Arun Jaitley accusing the RBI of failing to check indiscriminate lending by public sector banks between 2008-14.

Apart from working as for the RBI, he was a Consultant to the Ministry of Finance from 1998 to 2001. He also had other assignments in public and private sectors, including with Reliance Industries, IDFC Ltd, MCX Ltd and Gujarat State Petroleum Corporation.

Patel has a PhD in economics from Yale University, an M Phil from University of Oxford and a BSc from the University of London.

Why is the appointment crucial?

The move comes at a time when India has frequently opposed the IMF bailout programmes for Pakistan, expressing concerns over the use of such funds for funding war and cross-border terrorism by Islamabad.

Recently, the IMF board had approved lending of $1 billion to Pakistan under an existing multi-year programme involving a total support of $7 billion. It also cleared a $1.4 billion credit line for climate resilience efforts, which will be released in tranches.