Shaktikanta Das becomes the new RBI governor
What's the story
On Tuesday, Shaktikanta Das was made the Governor of Reserve Bank of India after Urjit Patel resigned on Monday. He will join office immediately.
Patel resigned ten months before the end of his tenure and cited personal reasons for the decision.
His resignation came as a shock to many and the Narendra Modi led government was slammed for 'destroying' the institute.
Information
Das defended demonetization in 2016
Das, a 1980 batch IAS officer of Tamil Nadu cadre was the Economic Affairs minister to GOI when demonetization move was announced. A staunch supporter of the note ban, he announced the regular changes in rules just as the RBI remained a mute spectator.
Tensions
The tensions between the RBI and the Centre
Earlier, in an unprecedented move, the Centre had invoked Section 7 of the RBI Act, in a bid to entrust the RBI Board with more operational power. The government is expected to push for the same in the upcoming meeting.
This is believed to have irked Patel, considering that the 18-member Board consists of 11 external members, two government nominees, and five RBI officials.
Market
Patel's resignation affected the market
Patel's abrupt resignation coupled with BJP's loss in assembly elections brought sour news for the market.
It was only towards the end of the day that Sensex gained composure. Nifty closed 0.58% higher at 10,459 while the benchmark Sensex ended 0.54% firmer at 35,150.
At the end of day, rupee closed at 71.85 against the dollar. On Monday, it had closed at 71.34.