Raghuram Rajan won't play second innings as RBI Governor

19 Jun 2016 | Written by Vaneet Randhawa; Edited by Gaurav

RBI Governor- Raghuram Rajan announced that he won't be seeking a second term as the Reserve Bank boss.

Dr Rajan in a statement said that he planned to return to academia upon the completion of his term on September 4.

Finance Minister Arun Jaitley said that the administration "appreciates the good work done by him and respects his decision".

In context: Raghuram Rajan's tenure: The good and the bad

Introduction Who is Raghuram Rajan?

Raghuram Govind Rajan was a professor at University of Chicago before being appointed chief economist at the International Monetary Fund (2003-07).

He was the youngest to hold this position.

On 5 September 2013, Rajan became the 23rd Governor of the Reserve Bank of India.

In 2016, his name appeared in the Time (magazine) list of the '100 Most Influential People in the World'

Awards and recognition

Rajan received Fischer Black Prize, given by the American Finance Association in 2003 and his book, Fault Lines: How Hidden Fractures Still Threaten the World Economy, won the Financial Times/Goldman Sachs Business Book of the Year award in 2010.
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Achievements Raghuram Rajan's hits as the Governor

Upon taking charge Rajan quickly stabilised the rupee and managed inflation successfully along targeted lines.

Checked the continuance of bad loans by requiring banks to classify stressed loans as NPAs (Non-Performing Assets)

He introduced competition into banking sector by licencing new kinds of banks

Brought global focus on the need for the West to limit its monetary policies from harming emerging markets.

Fissures Friction points between the Governor and the government

Modi government wanted RBI to cut rates, boost growth to which Rajan agreed in over 8 months.

The government and RBI governor had friction over restructuring RBI. RBI wanted to appoint COO through circulars if government nominees were not present.

RBI protested against government's proposal for a law for an independent debt management office and the proposal was withdrawn.

May 26Real cause of exit: Subramanian Swamy's attack on Rajan

BJP leader Subramanian Swamy had attacked Rajan's policies claiming they were not for the Indian system.

He had demanded his immediate removal from the top post.

The Rajya Sabha MP had even presented a 6-point chargesheet against Rajan to PM Modi attacking the RBI Governor of leaking "sensitive information to the world".

19 Jun 2016Raghuram Rajan won't play second innings as RBI Governor

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Chidambaram's reaction to Rajan's leaving RBI

P Chidambaram said "I am disappointed and profoundly saddened by the decision of Dr. Raghuram Rajan to leave the RBI...As I had said sometime ago, this government did not deserve Dr. Rajan. Nevertheless, India is the loser.”

20 Jun 2016Rexit threatens banks and markets

Raghuram Rajan's decision to step down without a second term as the RBI governor has led to markets and banks bracing themselves for any financial shock they may encounter.

The Securities and Exchange Board of India and stock exchanges would to play a critical role in maintaining a balance and secure the capital markets.

Monday's market trends would indicate the reaction to his departure.

23 Jun 2016Rajan says "I'll still be around"; Jaitley snubs Swamy

Taking a jibe at those writing his "obituaries", Raghuram Rajan- the Reserve Bank of India governor said that he will be around "a lot in India" even after leaves the Central bank.

He said he shouldn't be written off 'just yet'.

Notably, Jaitley too had snubbed Swamy and other politicians asking them to refrain from talking about economic officers who were working efficiently.

27 Jun 2016Modi lashes at Swamy for inappropriate remarks

Modi reprimanded BJP MP Subramanian Swamy for his attacks on RBI governor Raghuram Rajan and other important finance ministry aides.

He called such fondness of publicity "inappropriate", and said that anyone who thinks himself "bigger than the system is wrong".

He also praised Raghuram Rajan for the service he has rendered to the nation and said "wherever he will work, he will work for India and he is patriotic".