Former RBI Governor Urjit Patel appointed as IMF Executive Director

Former RBI Governor Urjit Patel appointed as IMF Executive Director

Why in News? 

Recently, former Reserve Bank of India Governor Urjit Patel has been appointed as Executive Director at the International Monetary Fund. This announcement came through an official order of the Ministry of Personnel. 

• On 28 August 2025, the Appointments Committee of the Cabinet approved the selection of economist Urjit Patel.
• Urjit Patel has been chosen for a fixed term of three years.

Who is Urjit Patel?

• About: Urjit Ravindra Patel is an Indian economist who has held several influential positions in financial institutions in India and abroad. He was born on 28 October 1963 in Nairobi, he later became a naturalised Indian citizen in 2013. Over the years he has worked with the International Monetary Fund (IMF), the Reserve Bank of India (RBI), and other major policy institutions. 

• Early Life: Urjit Patel was born in a Gujarati family settled in Kenya. His parents were Manjula and Ravindra Patel. His grandfather had migrated to Kenya from Mahudha village in Kheda district of Gujarat during the early part of the twentieth century. Patel grew up in Nairobi where his father managed a chemical manufacturing company named Rexo Products Ltd. 

• Education: Patel studied at Visa Oshwal Primary School and later at Jamhuri High School in Nairobi. After completing his early education, he moved to the United Kingdom where he pursued economics at the London School of Economics, earning a Bachelor of Science degree in 1984. He continued his academic journey at Linacre College, University of Oxford, where he obtained an M.Phil. in 1986. Patel then advanced to Yale University in the United States, receiving a Ph.D. in Economics in 1990. 

• Career: Patel joined the International Monetary Fund in 1990. At the IMF, he worked on country desks that covered the United States, India, Bahamas and Myanmar. 

• Between 1991 and 1994, he was associated with the IMF’s India desk during a critical phase of economic liberalisation. 

• In 1996, Patel moved to India on deputation from the IMF to the Reserve Bank of India, where he advised on reforms in the debt market, banking system and pension funds.

• During the early 2000s, he became a member of several high-level committees under the central and state governments. He contributed to reports on direct tax reform and state electricity boards. 

• • On 11 January 2013, Urjit Patel was appointed as Deputy Governor of the Reserve Bank of India. He worked under Governors Duvvuri Subbarao and Raghuram Rajan until September 2016.
  • Patel was elevated to the post of Governor of RBI on 4 September 2016. His tenure coincided with major financial reforms. He served until 10 December 2018, when he resigned citing personal reasons. 
  • In June 2020, he became the Chairman of the National Institute of Public Finance and Policy (NIPFP). He has also served as Vice President for investment operations at the Asian Infrastructure Investment Bank (AIIB) in 2022. 

Decisions During Urjit Patel’s RBI Tenure

• Demonetisation: Urjit Patel served as RBI Governor during the historic step of demonetisation in November 2016. The withdrawal of ₹500 and ₹1000 notes was aimed at controlling black money, fake currency and terror funding. The central bank under his leadership managed the large-scale replacement of currency across the country.

• Inflation Framework: During Patel’s term, the RBI introduced a formal monetary policy framework with a clear inflation target of 4% with a tolerance band of 2%. This framework gave the central bank a stronger role in controlling prices and ensuring financial stability in the economy.

• Banking Regulation: Patel focused on tackling the problem of non-performing assets (NPAs) in public sector banks. The RBI under his leadership tightened rules for recognising bad loans and introduced measures that pushed banks towards faster resolution of stressed assets.

• Financial Stability: Patel strongly defended the autonomy of the central bank. He resisted demands for excess transfer of RBI reserves to the government and highlighted the need for long-term financial strength. 

About IMF Executive Director

• Introduction: The IMF has 190 member countries as of 2025. These countries are grouped into constituencies for representation. Each constituency elects or appoints one Executive Director to the IMF Board. 

• Major economies such as the United States, Japan, China, Germany, France and the United Kingdom have the privilege of appointing their own Executive Director directly. 

• Smaller nations are grouped together and collectively choose their representative.

• Executive Board: The IMF Executive Board consists of 24 Executive Directors. These Directors are responsible for day-to-day operations of the Fund. They discuss country programs, lending decisions and policy issues.

• Selection: The appointment of an Executive Director happens either through direct nomination or election. 

• In the case of large shareholders like the United States, the appointment is made by the government and notified to the IMF.

• In the case of multi-country constituencies, member nations agree on a candidate and conduct an election if required. The selected name is then forwarded officially to the IMF. Once approved, the appointment is confirmed by the IMF Board of Governors.

Importance of an IMF Executive Director

• Representation of National Interests: An Executive Director acts as the official voice of a country or group of countries at the IMF. The director speaks on behalf of the member nation in board meetings. This ensures that the economic concerns and priorities of the country are heard in discussions that influence global finance. 

• Participation in Policy Decisions: The IMF Board, which includes Executive Directors, makes decisions on financial assistance, surveillance policies and global economic reforms. The Executive Director votes on these matters and directly influences the design of lending programs, debt restructuring strategies and surveillance mechanisms. 

• Influence in Support Programs: The IMF provides financial help to countries facing economic crises. The Executive Director takes part in discussions on which countries receive support and under what conditions. This responsibility is critical because it affects the global financial system.

• Strengthening Global Cooperation: The position of an Executive Director helps improve cooperation among countries. The director engages with representatives of different nations and works on building consensus on sensitive issues such as trade imbalances, currency stability and development finance.

• Safeguarding Domestic Economic Stability: The Executive Director also ensures that the IMF understands the domestic challenges of the country they represent. By presenting the realities of inflation, debt, growth and employment, the director helps shape IMF advice in a way that suits the national context.