Sanjay Malhotra appointed new RBI Governor

Sanjay Malhotra, a 1990-batch IAS officer from the Rajasthan cadre, has been appointed as the 26th Governor of the Reserve Bank of India (RBI). His appointment was confirmed by the Appointment Committee of the Cabinet and will take effect on December 11, 2024, for a term of three years. Malhotra succeeds Shaktikanta Das, whose six-year term as RBI Governor is set to conclude. This appointment comes at a critical time for the RBI, which faces challenges related to inflation control, economic growth, and financial stability.

Malhotra is currently serving as the Secretary (Revenue) in the Ministry of Finance, where he oversees both direct and indirect tax policy. In this role, he has been involved in shaping key aspects of India’s tax administration and policy reforms. Prior to his position as Secretary (Revenue), Malhotra served as the Secretary in the Department of Financial Services, where he handled a range of financial matters including the banking sector, financial regulations, and public sector financial institutions. His work spans across various sectors, including power, finance, taxation, information technology, and mines, reflecting his diverse administrative experience.

Malhotra holds a degree in engineering (Computer Science) from the Indian Institute of Technology (IIT) Kanpur and a Master’s in Public Policy from Princeton University. His academic background and professional experience have provided him with a broad understanding of public policy, governance, and financial management. Malhotra has held significant positions within both the central and state governments, with a strong focus on financial management, governance, and policy reforms aimed at improving the country’s fiscal and economic systems.

As the new RBI Governor, Malhotra will need to address several key economic issues, particularly managing inflation, which rose to 6.21% in October 2024, exceeding the RBI’s upper tolerance limit of 6%. The central bank’s inflation target is 4%, with a margin of 2%. Inflation control has become a critical task for the RBI, particularly as it impacts purchasing power and economic stability. Additionally, India’s economy grew at its slowest pace in seven quarters in the July-September 2024 period, presenting another challenge for the central bank’s monetary policy.

Malhotra will also oversee other key responsibilities, including the regulation and supervision of the financial sector, the formulation of monetary policy, and ensuring financial system stability. This includes decisions on interest rates, liquidity measures, and other policies that directly impact the economy. His predecessor, Shaktikanta Das, played a significant role in guiding the RBI during a period of economic uncertainty, including addressing challenges related to inflation, liquidity, and fiscal policy. Malhotra will now continue these efforts in his new role as the head of the central bank.