Finance Minister Arun Jaitley on Saturday said the government would soon decide on the successor to Reserve Bank of India Governor Raghuram Rajan.
“Raghuram Rajan has announced his intention to go back to academics at the end of his current assignment. The government appreciates the good work done by him and respects his decision. A decision on his successor would be announced shortly,” Jaitley said in a Facebook post.
He was reacting to Rajan’s letter to the RBI staff that “after consultation with the government, I want to share with you that I will be returning to academia when my term as Governor ends on September 4, 2016”.
If he decides to return to the University of Chicago from where he is on leave, he will have the shortest term since S Venkitaramanan who served for two years between December 1990 and 1992 as the central bank governor. Since then, most RBI governors have served for at least four to five years.
While serving and former RBI officers refused to speak on the issue, analysts said markets will react on Monday.
Despite his hawkish stance on key rates, India Inc has however, supported a second term for Rajan.
“Globally acknowledged. Inflation warrior. Economic guru. Independent mind. Bank surgeon. Raghuram Rajan leaving is a loss to the nation,” tweeted Harsh Goenka, chairman, RPG Enterprises.
Kiran Mazumdar Shaw, Chairman and Managing Director of Biocon, tweeted, “RBI Governor Raghuram Rajan not seeking second term - academic gain. RBI loss. He leaves a legacy of economic stability.”
Samir Arora, Fund Manager, Helios Capital, said, “It’s a sad day for how we deal with talent. India is a big country with a billion people so nothing matters cannot be the logic all our lives.”
Reacting to exit of Raghuram as RBI Governor, Infosys CEO and MD Vishal Sikka said that he was an extraordinary governor and wish him all the best in his teaching endeavor. When asked about the impact of his exit, Sikka said that the economy is strong and things will go on.