Government on Monday expressed hope that as the next Governor of RBI, Urjit Patel will keep in mind the need to push growth and ensure credit flow to sectors like agriculture as well as small industries while trying to meet the inflation target.
The government on Saturday appointed Deputy Governor Patel as the 24th head of the Reserve Bank. He will replace Raghuram Rajan who demits office on September 4.
“He (Patel) will keep mind the inflation target and the monetary policy. He will also keep in mind the requirements of growth which is a mandate of the Reserve Bank of India Act,” Economic Affairs Secretary Shaktikanta Das said.
“In particular, he has to ensure flow of credit to various sectors of economy, in particular agriculture and the MSME (Micro, Small and Medium Enterprises) sectors,” he said.
Patel has been holding charge of the monetary policy decisions of the central bank.
“The job of RBI governor is not only the monetary policy, RBI governor also looks into the regulations of banks, and non banking financing companies. In that role he has to ensure the smooth running of the financial sector,” Das added.
The government has notified monetary policy framework agreement under which RBI will target to contain inflation at 4 per cent with an upper and lower tolerance band of 2 per cent.
The six-member monetary policy committee will decide on interest rates based on this inflation target.
Source: Business Today