No Honeymoon for India's New Central Bank Chief

.....Local economists warn that Mr. Rajan, who has spent most of his professional life abroad, needs to prepare for the idiosyncrasies of Indian policy making. "Textbook policies don't always work in India because the economy has a lot of structural issues," said Ashima Goyal, an economist who advises the RBI on monetary policy. India's financial system includes a wide variety of formal and informal sources of credit such as commercial banks, cooperative banks, nonbank lenders and deposit companies, as well as private money lenders. The formal banking sector is dominated by state-run banks. The Reserve Bank has met considerable criticism for recent policy moves, especially its decision to impose limits in August on the amount of money Indian individuals and companies can send abroad...........

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