Size matters? Humorous SBI Research sidenote on RBI Governors' height and their policymaking report card

Ahead of RBI MPC decision on rate hike later this week, State Bank of India’s research department published a study, which found that the Reserve Bank of India (RBI) Governors with short height have proved to be more efficient than their taller counterparts.

SBI’s study was led by economist Soumya Kanti Ghosh. The study, published as a humorous sidenote in prelude to June MPC meeting, showed that the shorter central bank governors have been more effective in controlling inflation or growth and facing macro headwinds than their taller counterparts. In author’s own view, this study should be seen in a lighter vein and not meant to be taken as a substantive finding of any sorts.

“We do not actually believe that performance is determined by height of the RBI Governor, but it is an interesting coincidence, shared on a humorous note,” said SBI while giving a disclaimer to its report.

The state-owned bank evaluated the term of RBI governors in the last 2 decades based on four major factors. These factors include growth to nominal GDP, control in inflation, adverse global economic environment and number of crisis faced (none/single/poly). Overall performance score is equal to the product of score earned in each of the above four factors.

The tallest RBI governor in recent times, 6-foot 1-inch tall Raghuram Rajan, scored a relatively low 85.6 overall on SBI’s index based on the four parameters, hiking interest rates by 75 basis points in his tenure, before slashing them 150 bps in his tenure.

Also, 5-foot 9-inches tall Dr Subbarao scored lowest falling below the performance score of 50. This was mainly because of the extremely high inflation during his term.

However, current RBI governor Shaktikanta Das, who is just 5-feet and 6-inches tall, scored the highest at 108.1 on SBI’s index. Das’ era has seen a steep rate cuts of 250 bps and rate hike of another 250 bps during his term. This has made him the best performing RBI governor among his peers at 108.1 performance score, as per SBI’s research.

Das’ steady leadership came during the challenging and unprecedented times, including the collapse of a major non-bank firm, the first and second wave of the Covid-19 pandemic and the inflationary impact arising from the Russia-Ukraine War.