RBI Governor bats for continuity, stability in policy decisions

Sanjay Malhotra, the newly appointed governor of the Reserve Bank of India (RBI), Wednesday stressed continuity, stability, and inclusivity in policy making as the guiding leadership principles for the storied institution that, he said, symbolised both unwavering commitment to public good and inherent dynamism to help meet new-age challenges.

In his first public interaction with the media after taking over as the central bank’s 26th governor, Malhotra described his appointment as “both an honour and a huge responsibility”.

Reflecting on the institution’s role, he said: “The RBI, now in its 90th year, stands on the pillars of stability, trust, and growth. These are the cornerstones of our policy approach, and they are essential as India advances toward its vision for 2047.”

The central bank, under the watch of Malhotra’s predecessor Shaktikanta Das, kept the repo rate unchanged for the 11th time in a row in the last policy review meeting on December 6.

RBI cited the need to win the attritional battle against inflation even though the pace of economic expansion decelerated to a seven-quarter low of 5.4% in the three months to September. Inflation measured by Consumer Price Index (CPI) was seen at 6.21% in October, breaching the RBI’s upper tolerance level of 6% and significantly above the legal mandate of 4%.

Accent on continuity

“Businesses and individuals rely on continuity and stability in fiscal, monetary, and taxation policies,” Malhotra said, highlighting the need for consistency and predictability. “Sudden shifts can create uncertainty. So, we will ensure that our decisions are deliberated, transparent, and in public interest.” At the same time, the governor recognised the dynamic nature of the global landscape.

“While stability is critical, we must remain alert and agile in addressing challenges like geopolitical tensions, climate change, and evolving technologies,” he said. Expanding on RBI’s priorities, he underscored the ongoing mission of financial inclusion.

“We have made significant progress in bringing banking services to every corner of the country, but more remains to be done,” Malhotra said.

“Collaboration with stakeholders, including the central and state governments and financial regulators, will be key to achieving universal access to formal financial services.”

Harnessing technology

A strong proponent of technology, the incoming governor said the RBI would leverage innovation to enhance efficiency and accessibility. “The success of platforms like UPI demonstrates India’s capability to lead in financial technology. We will continue to use technology to lower costs, broaden access, and drive inclusive growth,” Malhotra said.

“However, we must balance this with safeguards to mitigate risks without stifling innovation.” Concluding his address, the governor emphasised the importance of public consultation and knowledge sharing in policymaking.

“The RBI does not have a monopoly on knowledge. Engaging with stakeholders and incorporating diverse expertise will ensure that our policies serve the public interest effectively,” he said.