How foreign reserves grew under different RBI governors

Shaktikanta Das was appointed as the 25th Governor of the Reserve Bank of India (RBI) on Tuesday, for a period of three years. A retired IAS officer of Tamil Nadu cadre, 1980 batch, Das has previously served as the secretary of the economic affairs and has worked closely with the RBI as a member of its board. He is currently a member of the 15th Finance Commission of India, and has represented the country at the G-20 as a Sherpa.

A closer look at the history of this top job at the central bank reveals Sir Benegal Rama Rau, a member of the Indian Civil Service, was the longest serving Governor of the Bank. Prior to joining the bank he served as the Indian Ambassador to the United States.

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His tenure witnessed the commencement of the planning era as well innovative initiatives in the spheres of co-operative credit and industrial finance. The recommendations of the All India Rural Credit Survey Committee appointed during his tenure led to the transformation of the Imperial Bank of India to State Bank of India. The proportional reserve system of note issue was replaced by a minimum reserve system to give the Bank greater flexibility. He resigned in the middle of January 1957 before his second extended term of office expired due to differences with the Finance Minister.

A quick look at the growth in foreign exchange reserves during their tenures could be interesting too. However, due to data constraints, only the performance of the last four governors could be captured.

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During Dr Y.V. Reddy's tenure as a RBI Governor (September 2003-September 2008), the total foreign exchange reserves grew the highest, approximately $ 1, 83,185 million. Dr. Reddy has made significant policy contributions in the areas of financial sector reforms; trade finance; monitoring of balance of payments and exchange rate; external commercial borrowings; centre-state financial relations; regional planning; and public enterprise reform and has been closely associated with institution building. He has several publications to his credit mainly in areas relating to finance, planning and public enterprises.

Also read: The task before the new RBI Governor Shaktikanta Das

The tenure of 22nd governor, Dr D Subbarao which ended in September 2013, however, saw the foreign exchange reserves depletion of $10,072 million. In the World Bank, he worked on issues of public finance in countries of Africa and East Asia. He managed a flagship study on decentralisation across major countries of East Asia including China, Indonesia, Vietnam, Philippines and Cambodia. He was also involved in initiation of fiscal reforms at the state level and has written extensively on issues in public finance, decentralisation and political economy of reforms.