India appoints Revenue Minister Sanjay Malhotra as new central bank governor | Wilnesh News

India has appointed Revenue Minister Sanjay Malhotra as the country’s central bank governor for a three-year term. According to CNBC TV18.

He will take over on Tuesday from outgoing governor Shaktikanta Das, who also served as finance minister before serving at the Reserve Bank of India (RBI) for six years.

Das, who led India’s demonetization initiative in 2016 before taking over as RBI, is seen as key to normalizing relations between the central bank and the government and steering India through the economic turmoil caused by the Covid-19 pandemic. However, his leadership has also come under scrutiny for containing interest rate changes in a high-inflation environment.

Malhotra will take over at a critical time for the world’s third-largest economy, which is trying to curb rising inflation without hurting growth.

Last week, the central bank chose to keep interest rates unchanged at 6.5% – above the central bank’s 4% target and 6% tolerance limit – after inflation surged to a 14-month high of 6.21% in October.

Markets are increasingly worried about whether the Reserve Bank of India’s restrictive measures may prevent the Indian economy from meeting the 6.6% growth forecast for the fiscal year ending in March 2025, after the country’s economic growth in the July-September quarter was only weaker than expected 5.4% %.

The International Monetary Fund currently expects the country with a population of 1.44 billion to have an economic growth rate of 7% this year and an inflation rate of 4.4% during the same period.

Among other challenges, Malhotra waded into the government’s push for the Reserve Bank of India to relax its Prompt Corrective Action (PCA) guidelines – a framework governing 11 state-run banks that allows the financial regulator to take action against financially ailing lenders. action.

— CNBC’s Ganesh Rao contributed to this report.