Shaktikanta Das, who completed six years as the Governor of the Reserve Bank of India (RBI) on December 10, 2024, has emerged as one of the longest-serving leaders in the institution’s history. His tenure marks a transformative era, as he navigated through formidable economic turbulence, including the COVID-19 pandemic, regulatory overhauls, and challenges in the banking sector, while pursuing growth, monetary stability and financial innovation with a steady hand.
Taking the helm amidst heightened economic uncertainty in December 2018, Das succeeded Urjit Patel, stepping into the role with an unflinching resolve to stabilise the economy. When Das took office, the Indian economy faced multiple challenges, including a liquidity crunch in the non-banking financial sector, high inflation, and a fragile banking system. His administrative acumen, honed during his tenure as Finance Secretary, proved instrumental in addressing these pressing issues.
One of his early challenges was resolving the crises in Punjab & Maharashtra Cooperative Bank and Yes Bank. Under Das’ leadership, the RBI facilitated their resolution, including the acquisition of PMC Bank by the Centrum Group, which established Unity Small Finance Bank. Between February and October 2019, the Monetary Policy Committee (MPC) slashed the repo rate by a cumulative 135 basis points (bps) over five successive meetings. This calibrated intervention aimed to revitalise economic activity, addressing sluggish growth and fostering liquidity in the financial system.
The onset of the COVID-19 pandemic posed an unprecedented economic crisis. Between March and May 2020, the MPC cut rates by 115 bps over two meetings, providing crucial support to a beleaguered economy. The RBI introduced liquidity measures, including a six-month loan moratorium for borrowers and one-time loan restructuring schemes, ensuring financial stability during the harsh lockdowns. Another innovation during his tenure was Targeted Long-Term Repo Operations (TLTROs), which provided liquidity to banks for onward lending to stressed sectors, including NBFCs and MSMEs.
Das’ tenure was marked by bold regulatory initiatives. In October 2021, the RBI introduced a scale-based regulatory framework for non-banking financial companies (NBFCs), stratifying them into four categories. This framework brought large NBFCs under stringent norms, aligning them with banks in terms of capital adequacy, prudential regulations, and governance standards. His reappointment in December 2021 reflected confidence in his forward-looking policies.
April 2022 witnessed the launch of the Standing Deposit Facility (SDF), a novel monetary policy instrument allowing banks to park surplus liquidity with the RBI. This tool became instrumental in managing post-pandemic liquidity dynamics. Between May 2022 and February 2023, the MPC raised interest rates by a substantial 250 bps over six consecutive meetings, countering inflationary pressures. September 2022 saw the issuance of digital lending guidelines, a decisive move to regulate the fintech ecosystem, albeit triggering significant disruption in the sector. Gross non-performing assets (GNPAs) of banks fell significantly from 10.8% in September 2018 to 2.8% by March 2024, reflecting enhanced banking resilience.
November 2023 brought to light concerns over the burgeoning growth in unsecured retail loans. In a preemptive measure to mitigate systemic risks, the RBI raised risk weights on unsecured consumer loans, including credit cards, by 25% for banks and NBFCs. Das also refrained from granting banking licenses to large corporate houses, citing potential conflicts of interest and risks of connected lending, a stance that bolstered the integrity of the banking system.
The final year of Das’ tenure epitomised the complexities of modern central banking. In April, the RBI barred Kotak Mahindra Bank from onboarding new customers via online and mobile platforms due to IT deficiencies, underscoring a zero-tolerance policy toward operational lapses. By September, India’s foreign exchange reserves reached a record $704.89 billion, a testament to resilient external sector management. However, December brought a stark reminder of global headwinds as the Indian rupee plunged to an all-time low of 84.75 against the US dollar.
In his latest MPC meeting in December 2024, Das led the decision to keep the benchmark repo rate unchanged at 6.5% for the eleventh straight meeting, maintaining a neutral stance to ensure inflation aligns with the target while supporting growth.
Das has been a strong proponent of digital payments and financial inclusion. Under his leadership, Unified Payments Interface (UPI) became central to India’s digital economy, with monthly transactions crossing 14 billion and values exceeding ₹20 trillion by mid-2024. UPI was globalised and integrated with international payment systems. A key milestone was the launch of the Central Bank Digital Currency (CBDC), modernising India’s financial infrastructure.
Under Das, the RBI transferred record surpluses to the Government, including ₹2.11 lakh crore in 2023-24 alone. Between FY19 and FY24, the RBI paid a total dividend of ₹6.61 lakh crore, providing critical fiscal support to the government during times of economic distress.
From introducing robust supervisory frameworks to fostering innovation through the RBI Innovation Hub and overseeing the withdrawal of ₹2,000 currency notes, Das’s tenure has been a saga of resilience, reform, and renewal. His legacy, etched in the annals of India’s economic history, serves as a touchstone for future custodians of the nation’s financial stability.
