Y. V. Reddy

Last updated

Yaga Venugopal Reddy (born 17 August 1941) is an Indian economist and a retired Indian Administrative Service (IAS) officer of the 1964 batch belonging to Andhra Pradesh cadre. Reddy served as governor of the Reserve Bank of India (RBI), India's central bank, from September 2003 until September 2008.

Contents

In 2010, he was awarded India's second highest civilian honour, the Padma Vibhushan. [1]

Early life

Yaga Venugopal Reddy was born on 17 August 1941 [2] [3] in a Telugu family in Patur village, Kadapa district of present-day Andhra Pradesh, India. [4] [5]

Education and honours

Reddy received his M.A. in economics from Madras University, India, and his PhD from Osmania University, Hyderabad. He also holds a diploma in economic planning from the Institute of Social Studies, Netherlands. [6]

Reddy was awarded the degrees of Doctor of Letters (Honoris Causa) by Sri Venkateswara University, India; and Doctor of Civil Law (Honoris Causa) by the University of Mauritius. On 17 July 2008, he was made an Honorary Fellow of the London School of Economics. [6]

Reddy receiving his Padma Vibhushan The President, Smt. Pratibha Devisingh Patil presenting the Padma Vibhushan Award to Dr. Yaga Venugopal Reddy, at the Civil Investiture Ceremony-II, at Rashtrapati Bhavan, in New Delhi on April 07, 2010.jpg
Reddy receiving his Padma Vibhushan

He has been a visiting fellow, London School of Economics, a full-time UGC Visiting Professor in Department of Business Management, Osmania University; full-time Visiting Faculty, Administrative Staff College of India and continues to be Honorary Professor at Centre for Economic and Social Studies at Hyderabad. Reddy was also Distinguished Professor of the Indian Institute of Technology (IIT) Madras. [6]

Positions held

In 1996, Reddy had been appointed deputy governor of RBI. He has also worked with the International Monetary Fund as executive director in 2002. Prior to joining the Indian Administrative Services (IAS), he worked as a lecturer from 1961.

While in the IAS, he held the positions of secretary (banking) in Ministry of Finance and principal secretary in Government of Andhra Pradesh and has worked with the governments of China, Bahrain, Ethiopia and Tanzania.

Reddy was Member of The Commission of Experts of the president of the UN General Assembly on Reforms of International Monetary and Financial System. In addition to the chair, Professor Joseph Stiglitz (USA), members of this UN Commission were drawn from Japan, Western Europe, Africa, Latin America, South and East Asia. [7]

Reddy was president of the Indian Econometric Society during 2011. [8] Reddy was on the advisory board of Institute for New Economic Thinking (INET). The INET advisory board includes Nobel laureates as well as other prominent economists. [9]

Reddy was on International Advisory Board of the Columbia Program on Indian Economic Policies, Columbia University, New York. He was a Member of an informal international group of prominent persons on International Monetary Reforms. He was also on Advisory Group of eminent persons to advise the finance minister of India on G-20 issues. [10]

He was the chairman of the Fourteenth Finance Commission of India since 3 January 2013 and served there till 25 November 2017. [11]

Reddy was appointed the twenty-first governor of the Reserve Bank of India on 6 September 2003 and served in that position for five years.

Contributions

Reddy has worked on piloting a calibrated approach to financial sector reforms.

A 19 December 2008 article in the New York Times has credited the tough lending standards he imposed on the Indian banks as RBI Governor for saving the Indian banking system from the sub-prime and liquidity crisis of 2008. [12]

At the Reserve Bank, he was Member-Secretary of two high level committees chaired by RBI governor Dr. C. Rangarajan: one on Balance of payments and the other on Public Sector disinvestments.

Reddy was also a member of the Reserve Bank of India's Policy Group on External Debt Statistics. Reddy is credited to have played a crucial role in framing macro-economic policies that helped quarantine the country from the domino effect of the financial crisis encountered by the South-East Asian countries during the later part of the 1990s. [13] He, along with Dr. C. Rangarajan, is also credited with the formulation of the course to be steered by the country to come out of the then Balance of Payments crisis.

In the Indian context, he was the first to use the term 'financial inclusion' in April 2005 in his Annual Policy Statement as Governor of the Reserve Bank of India. [14] Banks were urged in the Annual Policy Statement to review their existing practices to align them with the objective of financial inclusion. [15]

As Governor, he saw his job as making sure Indian banks did not get too caught up in the bubble mentality. He banned the use of bank loans for the purchase of raw land, and sharply curtailed securitisations and derivatives, and essentially prohibited off-balance sheet financing. He increased risk weightings on commercial buildings and shopping mall construction and increased bank reserve requirements. [12]

In one of his interview, Joseph E. Stiglitz, Professor of Economics at Columbia University and Nobel Laureate, had said 'If America had a central bank chief like Y.V. Reddy, the US economy would not have been in such a mess.' [16]

Less well-discussed is his work on rural banking, particularly on reviving co-operative banks and his focus on the common person. His term was marked by an emphasis on financial inclusion with the aid of information technology. He is widely consulted on many financial issues by institutions both in India as well as the world over. [17]

Publications

Reddy authored a book titled "India and The Global Financial Crisis : Managing Money and Finance" in 2009. This book provides insights into the making of public policies across a spectrum of areas between the years 2003 and 2008, a period of rapid growth of the Indian economy. [18] He came out with a sequel "Global Crisis, Recession and Uneven Recovery" which provided a thinker and experienced policymaker's understanding of the genesis, anatomy and impact of the financial crisis, and of the lessons it offered. [19]

Navigating through the debates between 2010 and 2012 on the continuing global financial crisis, his 2013 book "Economic Policies and India's Reform Agenda: New Thinking" reflected the confidence of Reddy who steered the nation's banks to safer waters. [20] "Advice & Dissent" published in 2017 is Reddy's memoir. [21]

Speeches and remarks

The former Governor, Reserve Bank of India (RBI), Dr. Y.V. Reddy delivering the 6th Dr. Raja J. Chelliah Memorial Lecture on the "Fiscal - Monetary Policy Interface", in New Delhi on March 24, 2017.jpg
Reddy at the 6th Raja Chelliah lecture
The former Governor, Reserve Bank of India (RBI), Dr. Y.V. Reddy delivering the 17th Central Vigilance Commission (CVC) lecture on "State and Market in India", in New Delhi (cropped).jpg
Delivering the 17th Central Vigilance Commission (CVC) lecture.

23 speeches given by Reddy during his term as RBI governor (2003 to 2008) are in the public domain. [21] Other speeches are also in the public domain, for example:

Reddy's presidential address on "A Tale of Two Commissions and Missing Links" at the 97th Annual Conference of the Indian Economic Association (IEA) in Udaipur on 27 December 2014, dwelt at length on the origin, evolution, linkages, achievements, limitations and the debates relating to the two major commissions on economic affairs in India. He also cited the success of the Chinese model where the concept of 'plan' had been replaced by 'guideline' in the country's 11th Five Year programme. He noted "The change led to China's transition from a Soviet-style planned economy to a socialist market economy and gained greater responsibility and power in overseeing China's economic development".

Reddy was invited to deliver the prestigious The Per Jacobsson Foundation Lecture in June 2012 at the Bank for International Settlements in Switzerland. In this lecture on 'Society, Economic Policies and the Financial Sector', the main message he gave was that society has put its trust in central banks and as such it expects central bank to ensure trust and confidence in money and finance and serve the interest of the masses. [22]

Timothy Geithner, former US Secretary of the Treasury and president of Federal Reserve Bank of New York, in his book Stress Test: Reflections on Financial Crises, published in May 2014, wrote about his brief encounter with India's former Central Bank Governor Y.V. Reddy who gave him a copy of "Complications: Notes from the Life of a Young Surgeon" by Atul Gawande. [Reddy] told me it was the best book I would ever read about central banking, and the parallels with financial crisis management really are striking. It's about making life-or-death decisions in a fog of uncertainty, dealing with the constant risk of catastrophic failure. [23]

Later while talking with Martin Wolf during his lunch with the Financial Times, Geithner mentions "It was a fascinating book, in part because he [Gawande] described how in that profession they do things that in economics we don’t that well. They have these things they call morbidity and mortality reviews every Friday, where they go over mistakes." [24] This story received mention in several book reviews. In a book review, Sam McNerney notes Reddy's recommendation is surprising but sensible. Gawande, a surgeon by trade, has knack for elucidating the inefficiencies of modern medicine and contrasting hospital management with business management. [25]

In another review of this book, Eric Warters write "To be clear, this book has absolutely nothing to do with central banking, at least not on the surface of it. This book is Dr. Gawande's retellings of myriad medical emergencies he encountered as a surgeon and how he managed the stress, uncertainty, and challenges that they brought on. For Geithner, the parallels were striking, as both men had to act quickly with limited information, sometimes on a hunch, with dire consequences at stake." [26]

Controversies

Reddy often courted controversy for deliberately guiding the Indian Rupee lower through verbal intervention. [27] Some of his media talks were perceived as ill-timed. [28]

In December 2003, Reddy was dragged into a controversy, when someone impersonating him called the then regional director of RBI Bhopal, Uma Subramaniam and asked her to lend 20 lakh (equivalent to 74 lakhorUS$88,000 in 2023) for a personal emergency. Subramaniam was able to collect only INR 9,00,000 by various means which included coercing her staff members. She then handed over the money to an accomplice of the impostor. She did not get back to Reddy regarding this incident. The sensational fraud rocked and embarrassed the RBI, and infuriated Reddy, who insisted on a full inquiry. [29]

Related Research Articles

<span class="mw-page-title-main">Reserve Bank of India</span> Central Bank of India

The Reserve Bank of India, abbreviated as RBI, is India's central bank and regulatory body responsible for regulation of the Indian banking system. Owned by the Ministry of Finance, Government of India, it is responsible for the control, issue and maintaining supply of the Indian rupee. It also manages the country's main payment systems and works to promote its economic development. Bharatiya Reserve Bank Note Mudran (BRBNM) is a specialised division of RBI through which it prints and mints Indian currency notes (INR) in two of its currency printing presses located in Mysore and Salboni. The RBI, along with the Indian Banks' Association, established the National Payments Corporation of India to promote and regulate the payment and settlement systems in India. Deposit Insurance and Credit Guarantee Corporation was established by RBI as one of its specialized division for the purpose of providing insurance of deposits and guaranteeing of credit facilities to all Indian banks.

<span class="mw-page-title-main">Bimal Jalan</span> Indian politician

Bimal Jalan is a former Governor of Reserve Bank of India and was a nominated member of the Upper House of India's Parliament, the Rajya Sabha during 2003–2009.

<span class="mw-page-title-main">Raghuram Rajan</span> Indian economist and former governor of Reserve Bank of India

Raghuram Govind Rajan is an Indian economist and the Katherine Dusak Miller Distinguished Service Professor of Finance at the University of Chicago's Booth School of Business. Between 2003 and 2006 he was Chief Economist and director of research at the International Monetary Fund. From September 2013 through September 2016 he was the 23rd Governor of the Reserve Bank of India. In 2015, during his tenure at the RBI, he became the Vice-Chairman of the Bank for International Settlements.

Maidavolu Narasimham was an Indian banker who served as the thirteenth governor of the Reserve Bank of India (RBI) from 2 May 1977 to 30 November 1977. For his contributions to the banking and financial sector in India, he is often referred to as the father of banking reforms in India. Some of the reforms attributed to his recommendations include changes to banking structures, introduction of private sector banks, creation of asset recovery funds, rural banking, changes to capital adequacy and provisioning standards, technology upgradation and modernization of public sector banks, and capital market linked banking reforms.

<span class="mw-page-title-main">C. D. Deshmukh</span> Indian politician

Sir Chintaman Dwarakanath DeshmukhICS was an Indian civil servant and the first Indian to be appointed the Governor of the Reserve Bank of India in 1943 by the British Raj authorities. He subsequently served as the Finance Minister in the Union Cabinet (1950–1956). It was during this time that he also became a founding member of the Governing Body of NCAER, the National Council of Applied Economic Research in New Delhi, India's first independent economic policy institute established in 1956 at the behest of Prime Minister Jawaharlal Nehru. After resignation from Union Cabinet he worked as Chairman of UGC (1956–1961). He served as Vice-Chancellor of University of Delhi (1962–67). He was also President of Indian Statistical Institute from 1945 to 1964, Honorary Chairman of National Book Trust (1957–60).

Shyamala Gopinath is Chairperson of HDFC Bank, India's largest lender by market capitalization. Ms. Gopinath is a former deputy governor of the Reserve Bank of India (RBI), a position she served for seven years.

Financial inclusion is the availability and equality of opportunities to access financial services. It refers to processes by which individuals and businesses can access appropriate, affordable, and timely financial products and services - which include banking, loan, equity, and insurance products. It provides paths to enhance inclusiveness in economic growth by enabling the unbanked population to access the means for savings, investment, and insurance towards improving household income and reducing income inequality

<span class="mw-page-title-main">Duvvuri Subbarao</span> Indian economist

Duvvuri Subbarao is an Indian economist, Central Banker, and retired IAS officer. He was the 22nd Governor of Reserve Bank of India, served under Prime Minister Dr. Manmohan Singh. After stepping down from RBI, he was a Distinguished Visiting Fellow first at the National University of Singapore and later at the University of Pennsylvania.

The 1991 Indian economic crisis was an economic crisis in India resulting from a balance of payments deficit due to excess reliance on imports and other external factors. India's economic problems started worsening in 1985 as imports swelled, leaving the country in a twin deficit: the Indian trade balance was in deficit at a time when the government was running on a huge fiscal deficit.

The Economic Times Awards for Corporate Excellence are the awards conferred by The Economic Times in the field of business, corporate and government policies, economies in India. It is an annual awards, conferred in various categories. Since 2017, Deloitte Touche Tohmatsu India LLP (Deloitte) has been the title sponsor of the awards. The 2018 leg of the awards will be held on 22 November in Mumbai.

Rakesh Mohan is an Indian economist and former Deputy Governor of Reserve Bank of India. He is the Vice Chairperson of Indian Institute for Human Settlements. He was appointed in November 2012 as an executive director of the IMF for a three-year term, and in April 2010, he joined Nestlé India, as a non-executive director. He is currently a part time member of Prime Minister's Economic Advisory Council (PMEAC).

From the 1991 India economic crisis to its status of third largest economy in the world by 2011, India has grown significantly in terms of economic development, so has its banking sector. During this period, recognizing the evolving needs of the sector, the Finance Ministry of the Government of India set up various committees with the task of analyzing India's banking sector and recommending legislation and regulations to make it more effective, competitive and efficient.

The Stiglitz Report: Reforming the International Monetary and Financial Systems in the Wake of the Global Crisis is a book on economics written by Nobel Laureate economist Joseph Stiglitz, documenting the necessary changes and reforms of the international financial institutions in the wake of the financial crisis of 2007–2008, and the subsequent Great Recession arisen from it.

Inflation rate in India was 4.83% as of April 2024, as per the Indian Ministry of Statistics and Programme Implementation. This represents a modest reduction from the previous figure of 5.69% for December 2023. CPI for the months of January, February and March 2024 are 5.10, 5.09 and 4.85 respectively. Inflation rates in India are usually quoted as changes in the Consumer Price Index (CPI), for all commodities.

<span class="mw-page-title-main">Deepak Mohanty</span> Indian economist

Deepak Mohanty is an economist. He holds the post of Chairperson of India’s pension regulator, Pension Fund Regulatory and Development Authority(PFRDA). He was Chief Economic Advisor, Federation of Indian Chambers of Commerce and Industry (FICCI) and was an independent Director on a few companies’ Boards. Prior to that, Dr. Mohanty was Whole Time Member, PFRDA.

<span class="mw-page-title-main">Urjit Patel</span> Indian economist

Urjit Patel is a Kenyan-born Indian economist, who formerly served as the 24th Governor of the Reserve Bank of India and also Deputy Governor of Reserve Bank of India, looking after monetary policy, economic research, financial markets, statistics and information management. He resigned from his post on 10 December 2018, being the first RBI governor to state personal reasons as a driving factor for resigning.

The Monetary Policy Committee is responsible for fixing the benchmark interest rate in India. The meetings of the Monetary Policy Committee are held at least four times a year and it publishes its decisions after each such meeting.

<span class="mw-page-title-main">Shaktikanta Das</span> Governor of the Reserve Bank of India (RBI)

Shaktikanta Das is serving as the current & 25th governor of the Reserve Bank of India (RBI). He was earlier a member of the Fifteenth Finance Commission and India's Sherpa to the G20. Das is a retired 1980 batch Indian Administrative Service (IAS) officer of Tamil Nadu cadre.

<span class="mw-page-title-main">Rohinton P. Medhora</span> Canadian economist

Rohinton P. Medhora is a Canadian economist. His fields of expertise are monetary and trade policy, international economic relations, and development economics. He is a Centre for International Governance Innovation (CIGI) distinguished fellow, former president of CIGI and professor of practice at McGill University's Institute for the Study of International Development.

Michael Debabrata Patra is an Indian economist and central banker. A career Reserve Bank of India officer, he is currently serving as one its four deputy governors.

References

  1. "This Year's Padma Awards announced" (Press release). Ministry of Home Affairs. 25 January 2010. Retrieved 25 January 2010.
  2. "PROFILE". YV Reddy. Retrieved 13 February 2022.
  3. Geetanath, V. (6 January 2017). "My best years were in RBI, says Y V Reddy". The Hindu. Retrieved 7 January 2017.
  4. http://www.hss.iitm.ac.in/oldwebarchive/yvreddy/index.html [ dead link ]
  5. Reddy, B. Dasarath (25 January 2017). "Undermining the identity of RBI should be a matter of concern: Y V Reddy". Business Standard India.
  6. 1 2 3 Y.V.Reddy. "Profile" . Retrieved 22 July 2017.
  7. "The Commission of Experts of the President of the UN General Assembly on Reforms of the International Monetary and Financial System. Members of the Commission". United Nations. Archived from the original on 14 March 2018. Retrieved 8 December 2021.
  8. The Indian Econometric Society; Conferences held; http://www.tiesindia.net/conference_held.html
  9. Innovative Thinkers Join Forces To Meet Challenges of Global Economic Crisis; Institute of New Economic Thinking (INET), Press Release;
  10. Institute for New Economic Thinking; "Dr. Yaga Venugopal Reddy | the Institute for New Economic Thinking". Archived from the original on 14 January 2014. Retrieved 13 January 2014.
  11. "Y V Reddy to head 14th Finance Commission". Business Standard . 3 January 2013. Retrieved 17 January 2014.
  12. 1 2 Nocera, Joe (19 December 2008). "How India Avoided a Crisis" . The New York Times. ISSN   0362-4331 . Retrieved 8 December 2021.
  13. "Y.V. Reddy appointed RBI Governor for five-year term". The Hindu BusinessLine. 19 July 2003. Retrieved 8 December 2021.
  14. "Annual Policy". Reserve Bank of India. Archived from the original on 6 January 2016. Retrieved 6 April 2015.
  15. The Report of the Internal Group to Examine Issues relating to Rural Credit and Microfinance (Chairman: Shri. H. R. Khan), Reserve Bank of India, July 2005 (Khan Committee); "Archived copy" (PDF). Archived from the original (PDF) on 10 June 2012. Retrieved 5 April 2015.{{cite web}}: CS1 maint: archived copy as title (link)
  16. Bajaj, Vikas (25 June 2009). "In India, Central Banker Played It Safe" . The New York Times. ISSN   0362-4331 . Retrieved 8 December 2021.
  17. Narasimhan, CRL (18 August 2011). "Don't write off the U.S. economy for now" . The Hindu. ISSN   0971-751X . Retrieved 8 December 2021.
  18. "About the Book. India and the Global Financial Crisis: Managing Money and Finance". Archived from the original on 2 February 2014. Retrieved 22 January 2014.
  19. "About the Book. Global Crisis, Recession and Uneven Recovery". Archived from the original on 2 February 2014. Retrieved 22 January 2014.
  20. "About the Book. Economic Policies and India's Reform Agenda: New Thinking". Archived from the original on 2 February 2014. Retrieved 22 January 2014.
  21. 1 2 Bandyopadhyay, Tamal (3 July 2017). "Y.V. Reddy's memoir—a chocolate with the wrapper on". Livemint. Retrieved 8 December 2021.
  22. "Lectures". perjacobsson.org. The Per Jacobsson Foundation. Archived from the original on 12 May 2021. Retrieved 8 December 2021.
  23. Timothy F. Geithner, Stress Test: Reflections on Financial Crises, May 2014
  24. Wolf, Martin (15 May 2014). "Lunch with the FT: Tim Geithner". Financial Times. Retrieved 8 December 2021.
  25. McNerney, Sam (11 August 2014). "The One Book That Helped Timothy Geithner Navigate the Financial Crisis". 250 words: The Wisdom of Business Books. Archived from the original on 18 February 2017.
  26. ""Complications" by Atul Gawande (Book Review)". ericwarters.com. Archived from the original on 23 November 2014.
  27. "Reddy and Subbarao manipulated Rupee".
  28. "Rupee Bulls hear message from Reddy". Archived from the original on 18 August 2013.
  29. Dalal, Sucheta (23 November 2010). "Opaque RBI rewards charge-sheeted official". Moneylife. Retrieved 8 December 2021.
Y. V. Reddy
The Governor of Reserve Bank of India, Shri Y.V. Reddy (cropped).jpg
Reddy in 2006
21st Governor of the Reserve Bank of India
In office
6 September 2003 5 September 2008