New RBI chief Shaktikanta Das to consult with banks, hints at more dovish stance

New Reserve Bank of India (RBI) Governor Shaktikanta Das said on Wednesday he would adopt a consultative approach and move quickly to meet the heads of state-run banks to tackle issues facing the banking sector.

“I propose to undertake consultations with stakeholders wherever necessary,” Das said at his first news conference.

His predecessor, Urjit Patel, resigned on Monday following a drawn out public dispute with the government.

Das said the banking sector faced many challenges and more measures needed to be taken. A meeting with the heads of a number of state banks would be held on Thursday, he said.

Analysts said the move to open up a dialogue was positive.

“He is trying to give comfort to the banking industry against the backdrop of continued concerns on the financial stability front,” said Rupa Rege Nitsure, chief economist at L&T Financial Holdings.

Das said it was “heartening” to note that inflation was broadly in line with the central bank’s target and the outlook looked benign for now.

Data to be released later on Wednesday is expected to show inflation in November eased to a 16-month low of 2.8 percent, according to a Reuters poll, giving policymakers more room to maneuver.

“Inflation targeting is an important function which the RBI Act has mandated. It’s a mandatory part of RBI’s functioning. So that will remain very important,” Das said, adding that the Act also mentions the importance of economic growth.

“Maintenance of the growth trajectory of the Indian economy is also important,” Das said.