ET Lifetime Achievement Award seeks to salute those who have conquered the peaks of corporate achievements & set examples for the current generation of India Inc leaders
Sometime in late 2008, when Prime Minister Manmohan Singh met his British counterpart Gordon Brown, a fair bit of their conversation revolved around the role of Yaga Venugopal Reddy, the governor of the Reserve Bank of India until September 2008. Brown was lavish in his praise for Reddy, especially for his handling of the financial sector in India - one of the few economies to emerge unscathed from the crisis in overseas credit markets. Much of the praise for Reddy since then has been from his peers and topnotch economists abroad. Ironically, for the better part of his tenure as Governor of the RBI between 2003 and 2008, Reddy had to cope with a lot of criticism for being somewhat conservative in his stance on a range of issues - opening up the Indian banking sector, free flow of capital, placing fetters on the real estate sector, the use of the country’s foreign exchange reserves, innovation in financial products and so on. But in hindsight, several of the former RBI governor's moves appear prescient, whether it's tightening of home loans or restrictions on securitised assets. Indian banks are far more safer and well-capitalised today, thanks to his policies. The ET jury recognised some of these in choosing him for this year’s Lifetime Achievement Award. In faraway London, Reddy was happy to hear about it. Reddy had recognised much earlier that financial regulation in the rest of the world had developed a life of its own. And having sensed the infirmities, he charted out a different path. Unlike many other central banks, RBI has had to do a deft balancing act in fulfilling several objectives: ensuring price and financial stability, regulating banking and non-banking segments, and acting as the merchant banker to the government. During his stewardship, Reddy tried to blend continuity with change - something he set out to do when he took over in 2003. And he did succeed, going by the fact that the Indian economy grew at over 8% during the better part of his tenure while keeping average inflation at a tad over 5%. Prime Minister Manmohan Singh, a former RBI governor himself, had once described the Indian central bank governor’s job as the loneliest. That thought must have crossed Reddy’s mind too when he resisted tremendous pressure from fiscal policy managers to ease monetary policy levers. Although the RBI is not fully independent, he came across as one determined to stand his ground. It’s a measure of his success that the government finally saw merit in his views, especially on the bank ownership issue. Reddy has often shown, albeit subtly, signs of being an independent central banker, quite like many of his peers. Reddy’s first love has been academics. It's not that there haven't been civil servants-turned-central bankers earlier at the Reserve Bank. Former finance secretaries such as M Narasimham, RN Malhotra and S Venkitaramanan had made the transition in the past, but Reddy had to operate in an era when each nuance of monetary policy was closely tracked by the financial markets. Comparisons are often made, however unfair they may sound. In comparison to Bimal Jalan -- his predecessor -- Reddy is seen as more of a micro manager. Some would blame this on his training as a civil servant. But Reddy does not lack backers either. His predecessor Jalan was perceived as a governor with vision, a clear thinker, more practical, yet distant. But there's little doubt about Reddy’s intellectual prowess; his personal skills set him apart from the rest. He was also seen as far more practical than many of his predecessors, and perhaps what’s more important, he had the courage of conviction to go that extra mile.
ET
