Key Points

Sanjay Malhotra will take over as governor of India’s central bank on Tuesday, replacing Shaktikanta Das.
Malhotra will take power at a critical time for the world’s third-largest economy, which is trying to contain rising inflation without hurting growth.

India has appointed Finance Secretary Sanjay Malhotra as governor of the country’s central bank for a three-year term, according to CNBC TV18.

He will take over on Tuesday from outgoing governor Shaktikanta Das, who also served as secretary in the finance ministry before his six-year stint at the Reserve Bank of India (RBI).

Das, who led India’s demonetisation initiative in 2016 before his time at the central bank, was seen as key to normalizing the RBI’s relationship with the government and guiding India through the economic turbulence of the coronavirus pandemic. Covid-19. However, his leadership also came under scrutiny during a high inflation environment for curbing moving rates.

Malhotra will take power at a critical time for the world’s third-largest economy, which is trying to contain rising inflation without hurting growth.

Last week, the central bank opted to keep interest rates unchanged at 6.5% after inflation rose to a 14-month high of 6.21% in October, above the 4% target and the 6% tolerance ceiling of the central bank.

Market concerns have grown over whether the RBI’s restrictive measures risk derailing India’s economy from achieving its 6.6% growth forecast for the fiscal year to March 2025 after posting weaker expansion. than expected of just 5.4% during the July-September quarter.

The International Monetary Fund currently forecasts economic growth of 7% for the country of 1.44 billion people this year, with inflation of 4.4% during the period.

Among other challenges, Malhotra also comes amid government pressure for the RBI to relax its prompt corrective action (PCA) guidelines, a framework that governs 11 state-controlled banks and allows financial regulators to take action against lenders. in poor financial health.