The Government on Saturday appointed Urjit Patel as the new Governor of Reserve Bank of India, ending two months’ speculation about Raghuram Rajan’s successor, whose tenure is ending on September 4. Patel would be the 24th Governor of RBI.

He was first appointed as Deputy Governor for three years in January 2013 and was given an extension this January.

Seen as Rajan’s lieutenant, Patel headed a committee that introduced landmark changes, including a switch to inflation-targeting and adopting consumer prices as the new benchmark instead of wholesale prices.

The changes he helped drive are considered to be among the most significant monetary policy reforms since India opened up its economy.

“We all are very happy. Being a colleague, he brings great continuity and familiarity. He has a clear understanding of what is going on,” said his fellow Deputy Governor SS Mundra while commenting on his appointment.

Mundra further said his colleague Patel has been continuously involved with RBI and has a clear opinion on all issues. “Every new leader will bring his or her own thinking. There could be some addition, (in) some processes little bit changes. It’s normal in transition. We are looking for great continuity and that provides great comfort,” he said.

Welcoming the appointment, SBI Chairman Arundhati Bhattacharya said, “Patel has been at the helm of institutionalising the inflation targeting regime in the monetary policy framework. His appointment signals continuity of policy intent, both on part of RBI and the Government.”    

Bhattacharya was one among the seven names speculated to succeed Rajan as the 24th Governor.

Former RBI Deputy Governor KC Chakrabarty stressed on the need for continuity in the central bank's policies. Recently, Rajan said there are several unfinished tasks.

"It's the best that has happened. He is competent and he will be able to deliver," Chakrabarty said, adding that Patel having worked in the system understands the environment, circumstances and policy measures "much better".

Patel will be the first Governor to oversee interest rate decisions by a monetary policy committee (MPC), a six-member panel chaired by the RBI Governor to decide on interest rates.

The Governor will not enjoy a veto power, but will cast vote in case of a tie.

In recent months, outgoing Governor Rajan has come under attack from some quarters, including BJP's Rajya Sabha member Subramanian Swamy, for what they call his reluctance to lower interest rates and giving priority to inflation control.

He will be the eighth Deputy Governor to be made Governor at RBI. Prior to his appointment as the Deputy Governor at RBI in 2013, Patel was advisor (Energy and Infrastructure) with Boston Consulting Group, while he has also worked with Reliance Industries in the past.

Patel, born on October 28, 1963, received his doctorate in economics from Yale University in 1990) and M Phil from Oxford (1986).

He has worked with the International Monetary Fund (IMF) between 1990 and 1995 covering the US, India, Bahamas and Myanmar desks.

later, he was on deputation (1996-1997) from the IMF to the Reserve Bank of India, before becoming a Consultant (1998- 2001) to the Ministry of Finance.

53-year-old Rajan, who was among the youngest to become RBI Governor three years ago, earned a reputation of fighting inflation that also led to criticism by some quarters including by BJP leader Subramanian Swamy, but it was Patel who was known as the 'inflation warrior' of the former IMF Chief Economist during his tenure at the Mint Street.

Incidentally, it was a Saturday when Rajan surprised everyone on June 18 about his decision against a second term, while the announcement for Patel's appointment also came on a Saturday.

Rajan was also appointed for a period of three years, which has been the case for most Governors so far.

Patel is the eighth Deputy Governor at RBI to be made Governor, the last being YV Reddy. Besides, at least five former Governors had served at IMF before becoming RBI chief, while a few others went on to work at IMF after leaving the central bank.

However, some Deputy Governors served as Governors only for interim periods.

RBI's second Governor James Taylor (1937-1943) was the first one to serve as Deputy Governor before being made Governor.

His successor for the top post of RBI CD Deshmukh was also Deputy Governor before he became Governor on the demise of his predecessor.

KG Ambegaokar, another Deputy Governor, was appointed as the interim Governor for about one and half months in 1957 till HVR Iengar could take over.

BN Adarkar, also a Deputy Governor, held the Governor's post during the interregnum till S Jagannathan could take over.

A Ghosh was the Deputy Governor since 1982 when he was appointed Governor for a brief period of 15 days in 1985 till RN Malhotra could take over.

On the other hand, C Rangarajan, before his appointment as the Governor in December 1992, held charge as Deputy Governor for over a decade.

YV Reddy also had a six-year tenure as Deputy Governor and also served as India's Executive Director at IMF before becoming RBI Governor in 2003.