Dove, hawk or owl?

SANJAY MALHOTRA, GOVERNOR, RBI

- K G NARENDRANATH

When Sanjay Malhotra, a quiet, unobtrusive IAS officer, was chosen as the 26th governor of the Reserve Bank of India (RBI) earlier this month for a three-year term, observers were surprised—briefly. Soon came the realisation that the government merely wanted a safe pair of hands at the helm of the principal financial-sector regulator. Seemingly, what it looks for is policy stability and soundness, without any serious unpredictability. Malhotra might be a perfect fit for the job, with all the necessary attributes: intellectual acumen, technological savviness, and a demeanour that combines sternness with almost self-effacing restraint.

In his interaction with the media after assuming the coveted—but extremely demanding—office, Malhotra summarised his approach to the task at hand, by emphasising the need to ensure stability and continuity in policy. He stressed the importance of ‘trust’ in effective regulatory governance, while expressing his disapproval of ‘day-to-day kind of policy’.

The 1990-batch Indian Administrative Service officer, however, also acknowledged the need for dynamism amidst the current set of challenges from the volatile external world and reiterated the central bank’s commitment to financial inclusion and leveraging technology for growth while mitigating risks.

Malhotra will be helped by his rich experience in finance and taxation, gathered over decades while handling various assignments in his parent (Rajasthan) cadre, and the Union government, including the relatively recent ones as secretary-financial services, and the Union revenue secretary. He has actually walked the talk on policy stability - as revenue secretary, he was often seen advising the field officers of the tax departments, to be mindful of not upsetting business growth and refrain from doggedly pursuing immediate revenue targets, at the expense of income generation. He used to invoke the 'golden goose'analogy.