- Markets Today
- Market Vista
- Equity Probe
- Equityright Blog
- Equity Edge
“On account of personal reasons, I have decided to step down from my current position effective immediately”- this was the first statement of the resignation letter of Urjit Patel, the 24th governor of the Reserve Bank of India. The sudden resignation of Urjit Patel sent shockwaves across the nation.
Since 1935, RBI has had 25 governors. From Osborn Smith to Sahktikanta Das, the position of the governor has been held by some if the most intellectual minds of the nation. The succession of governors began with Sir Osborn Smith.
Before coming to India, Sir Osborne Smith served for over 10 years with the Commonwealth Bank of Australia, and he served with the Bank of New South Wales for over 20 years. Due to his differences with the colonial government over interest and exchange rates, he gave his resignation before the end of his tenure.
Sir James Braid Taylor, the second governor of the RBI, held office from 1937 until his death in 1943. Taylor served for over a decade in the Currency Department of India and was also a member of the Indian Civil Service. He was associated with the preparation of the Reserve Bank of India Bill. He presided over the RBI during the war years. He was associated with the decision to break away from silver currency to fiat money.
After Sir James Braid, the first Indian to hold the position of the governor of RBI was Sir Chintaman Dwarakanath Deshmukh. He was appointed as the Government’s liaison officer in 1939. He served as secretary to the Board and as Deputy Governor. He was appointed as the Governor of the RBI after the death of Sir James Taylor. As the governor, he focused on establishing the Industrial Finance Corporation and on promoting rural credit. He was elected to represent India at the Bretton Woods negotiations in 1944. After the partition, he supervised the division of liabilities and assets of the RBI between India and Pakistan. He was against the nationalization of RBI. But when the Indian Government nationalized the Reserve bank on 1st January 1949, Deshmukh supervised the smooth transition of the Reserve Bank to a national institution from a shareholder's institution. From 1950, Deshmukh held the office of the Union Finance Minister. His tenure as the finance minister covered the period of the first five-year plan. In 1957, he resigned in protest against the Indian government's proposal to bifurcate Bombay between Maharashtra and Gujarat. C.D. Deshmukh was awarded the Padma Vibhushan in the year 1975.
The successor of C.D. Deshmukh, Sir Benegal Rama Rau was the longest-serving governor of the RBI. He held office 1949 to 1957. His period in office saw the innovative initiatives in the fields of industrial finance and co-operative credit. During his tenure, the recommendations of the All India Credit Survey Committee led to the transformation of the Imperial Bank of India to the State Bank of India. Due to his differences with the finance minister, Sir Benegal Rama Rau resigned in the year 1957. He was the second governor of the RBI to resign. He had serious differences with the then finance minister, T.T. Krishnamachari under the Jawaharlal Nehru government. Nehru was of the view that the central bank must advise the government on its policies but could not have policies contrary to those of the government. Due to the continuous prodding of Nehru, Rau decided to give up his position.
On the resignation of Benegal Rama Rau, K.G. Ambegaonkar was appointed as the interim governor. Prior to his appointment as deputy governor, he served as finance secretary and he was a member of the Indian Civil Service. His tenure as the governor of RBI lasted from 14th January 1957 to 28th February 1957.
The sixth governor of the RBI, H.V.R. Iyengar, served from 1957 to 1962. He was a member of the Indian Civil Service and served as the Chairman of State Bank of India before being appointed as the governor of the RBI. His incumbency witnessed India’s shift from paise and anna to decimal coinage. In 1960, the RBI acquired powers to enforce delicensing and amalgamation of banks. The concept of refinancing was initiated, which led to the establishment of the Refinance Corporation for Industry Ltd. H.V.R. Iyengar received the Padma Vibhushan in 1962.