Top bankers have hailed the contributions of the outgoing Reserve Bank Governor Duvvuri Subbarao saying he did his best during a tenure that was marked by difficult times for the economy.
“I think the Governor’s [five year] term has been in one of the most difficult environments globally and domestically. If you look at the world and our country today, there is so much change that you have to be at your feet and I can’t imagine anybody else doing a better job [than Mr. Subbarao]”, Axis Bank Managing Director and Chief Executive Shikha Sharma said.
Mr. Subbarao demits office on September 4 after being at the helm for five years — a period that saw the beginning of the global recession from which it is yet to recover.
Within a fortnight of him assuming office, global investment bank Lehman Brothers filed for bankruptcy and the hit pulled the global banking system down to an unprecedented credit crisis which eventually led to the worst recession since the Great Depression.
This was followed by a difficult period which saw RBI working in close coordination with the government and other financial sector regulators, as also other central banks, to ring-fence the economy.
While the fiscal and monetary stimuli ensured that the economy did not fall off the cliff, this soon gave way to a spike in inflation. This saw rise in policy rates from October 2010 for a year or so even as growth started coming down.
As Mr. Subbarao’s term moved close to ending, worries over slowing growth and stubborn inflation complicated the matter for the central bank. His problems got compounded with the fall of the Rupee beginning May-end. It declined to a low of 68.85 intra-day to the dollar early last week.
“I’ve the highest respect for him. He has been through difficult times and let’s put it this way: in hindsight, it’s very easy to judge anybody...I do believe he did a great job”, Aditya Puri, who heads the second largest private lender HDFC Bank, said.
“One thing that has not been fully talked about during his tenure is that he has reduced CRR and SLR by 4 percentage points, which to my mind, in a tenure of five years is very significant”, said Pratip Chaudhuri, the chairman of the country’s largest bank State Bank.
Mr. Chaudhuri, who favoured doing away with CRR, added that its reduction was one of the reasons for the economic buoyancy during early part of Mr. Subbarao’s stint.
“To some extent, the buoyancy which we saw in the economy in the previous two years, could be attributed to that”, Chaudhuri said.