The markets were taken by surprise when Michael Debabrata Patra, the executive director of the Reserve Bank of India (RBI) voted in favour of an interest rate cut in the monetary policy review last February. Mr Patra, who has been a member of the six-member monetary policy committee — which sets interest rates — since its inception, was seen as an inflation hawk by central bank watchers. Hence, his stance in the February policy came as a surprise to many.
It also showed that Mr. Patra, a career central banker who joined the RBI in 1985, was not dogmatic about any issue, but would retain flexibility and act as the situation demanded. Probably, MPC members saw growth coming down sharply, which Mr. Patra had also realised and therefore voted in favour of a rate cut in the next four policies as well.
Mr. Patra (59) has been appointed as the Deputy Governor for three years and is likely to get the key monetary policy department. The post of economist Deputy Governor fell vacant after Viral Acharya quit in July last year. The central bank is expected to reshuffle the Deputy Governor’s portfolios once Mr. Patra takes charge.
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Mr. Patra, an economist and one of the architects of the inflation-targeting framework, will be the first Deputy Governor from the RBI’s research cadre after a gap of 25 years — the last one being S.S. Tarapore.
One of the biggest strengths of Mr. Patra is that he has been long enough in the monetary policy department to see different interest cycles. He became the principal adviser of the monetary policy department in July 2012. Within RBI, he is seen as a link between academic research and policy-making.
He has worked in the International Monetary Fund as senior adviser to Executive Director (India) during December 2008 to June 30, 2012, when he actively engaged in the work of the IMF’s Executive Board through the period of the global financial crisis and the Euro area sovereign debt crisis.
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