Prime Minister Manmohan Singh had approved his appointment on August 6, 2013 for a term of three years.
Raghuram Rajan on Wednesday took over as the new Governor of the Reserve Bank of India (RBI).
Mr. Rajan, 50, an economics professor who also served as chief economist at the International Monetary Fund, took charge from the outgoing Governor Dr. Subbarao.
The duo shook hands warmly and hugged after Mr. Rajan signed papers taking over as the 23rd Governor of the central bank.
“Ten minutes ago, I handed over charge to Mr. Raghuram Rajan,” Dr. Subbarao said after stepping out of Mint Road. “The country could not have asked for a more capable person to lead the RBI in these most difficult times.”