Reserve Bank of India governor Raghuram Rajan will not seek a second term as the head of the country’s central bank when his term ends in September 4. Instead, he has decided to return to his teaching job at the University of Chicago. This announcement puts end to the speculation about him getting second term or not. Rajan off- late has faced severe criticism from BJP leader Subramanian Swamy . Swamy had in his letter to Prime Minister Narendra Modi wanted Rajan to be ousted as RBI governor at the earliest.
Rajan in a note to RBI staff which was released on the central bank’s website Rajan said he will not continue in his current job after September 4. “I am an academic and I have always made it clear that my ultimate home is in the realm of ideas,” Rajan said while reflecting on his accomplishments in the last three years.
“Inflation is in the target zone, but the monetary policy committee that will set policy has yet to be formed. Moreover, the bank clean up initiated under the Asset Quality Review, having already brought more credibility to bank balance sheets, is still ongoing. International developments also pose some risks in the short term.”
“While I was open to seeing these developments through, on due reflection, and after consultation with the government, I want to share with you I will be returning to academia when my term as Governor ends on September 4, 2016. I will, of course, always be available to serve my country when needed,” Rajan said.
A former chief economist at the International Monetary Fund, Rajan was appointed as the Governor of RBI in 2013. His efforts to contain inflations rate and build confidence among foreign investor in the country has been widely lauded by many. However, in recent weeks he has had to face ire of some ruling party politicians for not lowering interest rates enough, raising doubt over his re-appointment