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Raghuram Rajan: The Man Who Revolutionized The Indian Banking System

During his academic days, he won the Director's Gold Medal in IIT Delhi and was a Gold medalist at IIM Ahmedabad.

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Raghuram Rajan was born on 3 February 1963, in Bhopal, Madhya Pradesh. Wikimedia Commons
Raghuram Rajan was born on 3 February 1963, in Bhopal, Madhya Pradesh. Wikimedia Commons
  • On September 5, 2013, Rajan took charge of Governor of India’s central banking institution
  • Raghuram Rajan graduated in electrical engineering from IIT Delhi
  • Under Raghuram Rajan, the RBI licensed two universal banks and approved eleven payments banks

Raghuram Rajan is one of the technically financial people to grace the Indian economy and banking sector. He came at the time when the Indian economy was in the worst crisis ever faced in last decades. Through his meticulous planning, he banked on reforming and stabilizing the financial situation in the nation. On September 5, 2013, Rajan took charge of Governor of India’s central banking institution, succeeding Duvvuri Subbarao.

Raghuram Rajan was born on 3 February 1963, in Bhopal, Madhya Pradesh in a Tamil family. His father was a senior officer in the Intelligence Bureau department. He is married to Radhika, a classmate from IIM and has two children.

Also Read: Was ‘The First Women President Of India’ A Well Deserved One?

Raghuram Rajan graduated in electrical engineering from IIT Delhi and then he joined Tata Administrative Services as a management trainee. However, he soon left this to pursue a doctoral program in management at the MIT Sloan School of Management. After that, he acquired a Post Graduate Diploma in Business Administration from IIM, Ahmedabad in 1987 and later Raghuram Rajan did his PhD from the Massachusetts Institute of Technology.

Raghuram Rajan was appointed as the Vice-Chairman of Bank for International Settlements (BIS) on 9th November 2015.  Wikimedia Commons
Raghuram Rajan was appointed as the Vice-Chairman of Bank for International Settlements (BIS) on 9th November 2015. Wikimedia Commons

During his academic days, he won the Director’s Gold Medal in IIT Delhi and was a Gold medalist at IIM Ahmedabad. Even after being so bright, he admitted of having poor command over the Hindi language.

Take a look at some of the aspects related to the life of one of the genius economist of India: 

  1. After Raghuram Rajan joined as the Governor of the RBI, the rupee rose 2.1 percent against the US dollar. Before that, the rupee had weakened sharply against the dollar, hitting almost Rs 69 to a single dollar.
  2. To bring down the inflation, the RBI under Rajan adopted the Consumer Price Index (CPI) despite the Central Government’s disapproval. Consequently, the CPI dropped from 9.52 percent in August 2013 to 5.24percent in April 2016, accompanied by the required drop in global commodity prices.
  3. Under Raghuram Rajan, the RBI licensed two universal banks and approved eleven payments banks. It was done to extend the country’s banking services to the two-thirds of the population, who were until then still deprived of basic banking facilities.
  4. Raghuram Rajan has the privilege to be appointed as the youngest-ever Economic Counselor and Director of Research (chief economist) at the International Monetary Fund (IMF) from October 2003 to December 2006.
  5. During his stay at IIT Delhi, Raghuram Rajan was the head of the student’s council.
  6. Raghuram Rajan was ranked by his fellow mates as the economist with ‘the most important ideas for a post-crisis world’ in a 2011 poll in The Economist.
  7. Raghuram Rajan has the distinction of being featured on Foreign Policy magazine’s Top 100 Global Thinkers list in 2010 and 2012.
  8. Raghuram Rajan has also served as a professor in the University of Chicago’s Booth School of Business in the economics faculty. Before leaving the position due to public service commitments, he was awarded the accolade in 2007 which he held till 2013.
  9. Raghuram Rajan was appointed as the Vice-Chairman of Bank for International Settlements (BIS) on 9th November 2015. The bank was established as an international company by shares of the central banks of different countries. The bank provides banking facilities to the central bank and is also regarded as the key bank of the central banks.
  10. Raghuram Rajan authored a very popular book, ‘Fault Lines: How Hidden Fractures Still Threaten the World Economy,’ was awarded the Best Business Book of the Year in 2010 by Financial Times-Goldman Sachs. This book argued that serious flaws in the economy are to blame for the current economic crisis.

    After Raghuram Rajan joined as the Governor of the RBI, the rupee rose 2.1 percent against the US dollar. Wikimedia Commons
    After Raghuram Rajan joined as the Governor of the RBI, the rupee rose 2.1 percent against the US dollar. Wikimedia Commons
  11. Raghuram Rajan was awarded the inaugural Fischer Black Prize by the American Finance Association in January 2003. The award is given to the financial economist under the age of 40 who has made the significant contribution to the sector and is given in every two years.
  12. In 2005, Raghuram Rajan presented a theory outlining the looming financial dangers and risks associated with the current system and he got a very negative response for it. But when an actual global economic crisis occurred in 2008, his analytical skills came true.
  13. During Raghuram Rajan’s term as the RBI(Reserve Bank of India) governor, the RBI sold the longest ever government bonds with a 40-year maturity.
  14. In September 2003, Raghuram Rajan became the youngest ever to be appointed as the Economic Counselor and Director of Research (Chief Economist) of the International Monetary Fund.
  15. Raghuram Rajan has served at the University of Chicago’s Booth School of Business as the Eric J. Gleacher Distinguished Service Professor.

Next Story

Sri Lanka’s Prime Minister Gets Reinstated

A spokesman for Wickremesinghe said he was expected to form a Cabinet in the coming days, with priority given to the 2019 budget

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Sri Lanka, prime minister
Sri Lanka's ousted Prime Minister Ranil Wickremesinghe looks on during a parliament session in Colombo, Dec. 12, 2018. On Sunday he was reinstated as prime minister, ending a political crisis.

Sri Lanka’s sacked Prime Minister Ranil Wickremesinghe was reinstated Sunday, his party said, ending a 51-day crisis that had paralyzed the island nation and pushed it toward debt default.

The 69-year-old leader was sworn in by President Maithripala Sirisena, who sacked him Oct. 26 and triggered a power struggle that brought the country’s government to a standstill.

Wickremesinghe had refused to step aside since being sacked and replaced by former leader Mahinda Rajapaksa.

Power struggle won

Sri Lanka had drifted without a functioning government for nearly two months as the rival factions jostled for power in parliament and the courts.

Sri Lanka, Parliament, Prime minister
Supporters of ousted Sri Lankan Prime Minister Ranil Wickremesinghe celebrate outside the supreme court complex in Colombo. VOA

Sirisena had vowed to never reappoint Wickremesinghe, who he publicly castigated in speeches in recent weeks, as prime minister under his watch.

The acrimony between the two was underscored Sunday when Sirisena barred journalists from attending the swearing-in ceremony, leaving it to Wickremesinghe’s legislators to announce the appointment.

“We thank the citizens of the country who fought the illegal seizure of power and ensured that democracy was restored,” his United National Party of Sri Lanka posted on Twitter

President’s appointee failed

Rajapaksa, Sirisena’s appointee, was unable to govern, failing many times to muster a majority in parliament.

Sri Lanka, prime minister
Sri Lanka’s disputed Prime Minister Mahinda Rajapaksa gestures as he arrives for a meeting with his supporting lawmakers at the parliamentary complex in Colombo, Sri Lanka, Nov. 29, 2018. VOA

He was defeated six times on the floor of the legislature before being forced to step down Saturday.

Sirisena suffered a huge setback when the highest court in the country ruled last week that he acted outside the constitution when he sacked parliament in early November.

The court also confirmed Friday that Rajapaksa and his purported Cabinet could not exercise the powers of the office they held.

Also Read: President’s Dissolution of Parliament Unconstitutional: Sri Lanka’s Court

A spokesman for Wickremesinghe said he was expected to form a Cabinet in the coming days, with priority given to the 2019 budget, without which foreign debt servicing may not be possible.

Sri Lanka had been braced for a government shutdown as parliament failed to approve spending for 2019, and ratings agencies downgraded the country’s credit rating amid fears of a sovereign debt default. (VOA)