Expert Views: Insider Urjit Patel named next India cenbank governor

REUTERS - Insider Urjit Patel was named on Saturday as the next governor of the Reserve Bank of India for a three-year term, succeeding Raghuram Rajan who dropped a bombshell in June by announcing he did not plan to stay on.

Patel, 52, is currently a deputy governor and headed a committee on monetary policy reforms whose recommendations on inflation-targeting and creating a new monetary Policy Committee were backed by Prime Minister Narendra Modi's government.

Here are comments from bankers, analysts and officials on Patel's appointment:

CHANDA KOCHHAR, MANAGING DIRECTOR AND CEO, ICICI BANK

"As the Deputy Governor of RBI, Dr Urjit Patel has played a key role in developing the new monetary policy framework that has focused on reigning in inflation and has imparted stability to the currency."

"His appointment would ensure a smooth transition and continuity in monetary policy, as India puts in place major structural reforms to transition to a higher growth path."

NILESH SHAH, MANAGING DIRECTOR, KOTAK MAHINDRA MUTUAL FUND

"Dr. Urjit Patel's appointment provides continuity to the monetary policy making especially related to inflation targeting. It reassures both debt and equity market for continuity in policy making at the RBI."

"Market participants will be keenly looking forward to next credit policy to hear governor's view point on macro-economic environment and agenda for the future."

VAIBHAV SANGHAVI, MANAGING DIRECTOR, AMBIT INVESTMENT ADVISORS

"I think it is a very strong and positive step taken by the government. The focus for the monetary policy committee would remain on inflation going forward, which indicates stability and continuation in economic policy."

"All in all a good macro announcement and our stance remains a 25 basis point cut by the year end."

MADHAVI ARORA, ECONOMIST, KOTAK MAHINDRA BANK

"Urjit Patel's appointment will essentially be seen as continuation of Rajan's school of thought and his unfinished agendas."

"His appointment will also cement the inflation targeting regime especially given that he was chiefly instrumental in formalizing CPI as inflation anchor for monetary policy making."

ARUNDHATI BHATTACHARYA, CHAIR, STATE BANK OF INDIA

"The appointment of Urjit Patel comes as a welcome move. Dr. Patel has been at the helm of institutionalizing the inflation targeting regime in the monetary policy framework."

"His appointment signals continuity of policy intent, both on part of RBI and Government."

RADHIKA RAO, GROUP ECONOMIST, DBS BANK

"Dr. Patel's appointment is a vote for policy continuity and ensures price stability remains a priority. This removes another worry point for the markets, after the government also retained the inflation target of 4 percent around a 2 percent band.

"Being one of the chief architects of the monetary policy framework with inflation- targeting as the policy goal, his bent will be relatively hawkish. Thus the 25bp rate cut call for 4Q16 is contingent on food prices cooling off sharply. Odds of a rate cut in October however have fallen for now."

G. PADMANABHAN, NON-EXECUTIVE CHAIRMAN, BANK OF INDIA

"Excellent choice. This will ensure continuity of approach and policies of RBI in several areas. He was also a part of the team in RBI that did the fire fighting during taper tantrum period.

"Since Dr. Patel led the attempt to put in place a new monetary policy paradigm, he is eminently suited to implement the changes. All the best to Dr. Patel as he gears up to meet several internal and external market challenges."

RUPA REGE-NITSURE, GROUP CHIEF ECONOMIST, L&T FINANCE "Dr. Patel's appointment as the RBI Governor would give a sense of policy continuity. It will assure international investors that the flexible inflation targeting framework will be taken to its logical end and it's absolutely essential for India's monetary policy credibility."

AJAY BODKE, CEO AND PORTFOLIO MANAGER, PMS PRABHUDAS LILLADHER

"Institutional investors both domestic and foreign would welcome the Indian government's appointment of RBI Deputy Governor Dr. Urjit Patel as successor to Dr. Raghuram Rajan.

"It signals a seamless continuity in the policies pursued by the RBI to conduct its monetary policy in an independent manner."

ANEESH SRIVASTAVA, CIO, IDBI FEDERAL LIFE INSURANCE CO

"There were few factors we were looking at when it comes to new Governor's appointment. They are: monetary policy framework, inflation target range, systemic liquidity and continuation of existing policies. The choice of Urjit Patel ensures all these factors are taken care of.

"Being the man who has seen RBI's policies and framework, we can expect continuation of what we saw from Rajan.

"Do we need a dovish governor who could be good for short term, or do we need someone who could ensure long term sustainability of policies which have been framed and in place now? I think the latter makes sense and Urjit Patel fits the bill here."

DEVENDRA KUMAR PANT, CHIEF ECONOMIST, INDIA RATINGS & RESEARCH

"Continuation in monetary policy will remain. He is the architect of inflation targeting approach. Investors don't want any change in policy direction.

"He has worked with IMF, he has worked with the corporate sector and he was with the Brookings Institution. So, coming from different areas, he knows how things are and what kind of action is required.

"The market will welcome it (his appointment). Maybe you will see a strengthening of rupee vis-à-vis dollar if globally there is no turmoil. You may also see bond yields responding."

ANANTH NARAYAN, REGIONAL HEAD OF FINANCIAL MARKETS, ASEAN AND SOUTH ASIA, STANDARD CHARTERED BANK

"It's good to have the uncertainty and suspense out of the way; we can focus on the way forward now. Given the monetary policy framework was envisaged by the eponymous Dr. Urjit Patel committee, there should be continuity in this critical aspect. To that extent, global investors and other stakeholders will welcome this appointment.

RITIKA MANKAR, ECONOMIST, AMBIT CAPITAL

"Choice of Urjit Patel is in line with our expectations as he was one among the top two candidates we were working with.

"What we like about him is: One, he's seen RBI change from being a loosely inflation-focused central bank to one that formally targets CPI inflation.

"And second, his experience as a deputy governor in charge of monetary policy under the governorship of Rajan will hold him in good stead. However, what remains to be seen is how he handles banking as a sector, he probably lacks what a candidate like (SBI Chair) Arundhati Bhattacharya, would have brought to the table."

(Reporting by India newsroom; Compiled by Rafael Nam)