Know about the new RBI governor Raghuram Rajan | India governor Raghuram Rajan on Wednesday announced a slew of proposals in his first day of office

Raghuram Rajan is the 23rd governor of the Reserve Bank of India. He has been appointed for a period of three years, and will take charge from D. Subbarao, who is exiting after an extended five-year term.

This will be Mr. Rajan's second assignment in the country. He was appointed the Chief Economic Adviser to the Finance Ministry in August last year.He was the Economic Counselor and Director of Research (simply put, the chief economist) at the International Monetary Fund from September 2003 till January 2007.Mr. Rajan has worked as the Eric J. Gleacher Distinguished Service Professor of Finance at the University of Chicago's Booth School of Business.He has also served as the Bertil Daniellson Visiting Professor of Banking and Finance, Stockholm School of Economics, 1996-97; Visiting Professor of Finance, Northwestern University, 1996-97, and the Fischer Black Visiting Professor, Massachusetts Institute of Technology, 2000-01.He earned his bachelor's degree in electrical engineering from IIT-Delhi, before pursuing his MBA in 1987 from the Indian Institute of Management, Ahmedabad, followed by a PhD in 1991 from Massachusetts Institute of Technology. He was a gold medalist at both IIT and IIM.

Reserve Bank of India governor Raghuram Rajan on Wednesday announced a slew of proposals in his first day of office.

MONETARY POLICY

• Postpones first monetary policy statement as governor to September 20 from September 16
• To set up a panel on how to strengthen monetary policy framework, which will submit report in three months

RUPEE, CAPITAL INFLOWS

• To allow exporters to re-book cancelled forward currency contracts up to 50 per cent of the value of cancelled contracts and up to 25 per cent for importers
• Will push for more trade settlements in rupees, open up financial markets for those who receive rupees to invest back in
• Will offer a special window for swapping foreign currency non-resident (FCNR) deposits with a minimum tenor three of years and more, at a fixed rate of 3.5 per cent per year
• Will raise overseas borrowing limit of 50 per cent of unimpaired Tier I capital to 100 per cent for banks
• Borrowings mobilized under this provision can be swapped with RBI at a concessional rate of 100 basis points below the ongoing swap rate prevailing in the market

DEBT/BROADER MARKETS

• Will introduce cash-settled 10-year interest rate future contracts
• Will examine introduction of interest rate futures on overnight interest rates
• Will steadily but surely liberalise markets, restrictions on investments and position-taking
• To issue inflation-indexed savings certificates tied to CPI to retail investors by end November
• Need to reduce requirement for banks to invest in government securities in a calibrated way

BANKING SYSTEM

• To set up external committee to screen bank license applicants
• Hopes to announce licenses within, or soon after, January 2014
• Will push foreign banks to set up wholly-owned subsidiaries
• Will look at continuous or on-tap bank licensing system for applicants
• Will issue guidelines to free rules on setting up bank branches for domestic commercial banks
• To look at rising non-performing assets and restructuring/recovery process
• Need to accelerate the working of debt recovery tribunals and asset resconstruction companies
• Proposes to collect credit data, examine large common exposures among banks
• Will encourage banks to clean up their balance sheets
• Will encourage banks to commit to raising capital when necessary
• Bad loan problem is not alarming yet, but will fester if unaddressed
• To set up committee that will access every aspect to financial inclusion