RBI’s backseat driver Rakesh Mohan takes exit to Stanford

Having lost the Reserve Bank of India Governorship to the then Finance Secretary Duvvuri Subbarao in September 2008,Rakesh Mohan,Deputy Governor,RBI,has taken premature retirement to be an academician at Stanford University in the United States. Mohan,61,was appointed on July 2,2005 as the Deputy Governor and had a five-year term at the RBI.

Sources said Mohan was not in favour of reducing key policy rates despite clear signs of a powering down of the economy. Subbarao,who took over as the RBI Governor at a time when India was pulled into the global financial crisis,was “held hostage” to the strong views within the RBI against loosening up the monetary stance,they said.

Mohan’s appointment as Distinguished Consulting Professor at Stanford’s Centre for International Development will be for six months from June 15,an RBI press statement said today.

Subbarao said in the statement: “Over the last several months,as I traversed a steep learning curve,I have grown to depend on him for advice and counsel.” Mohan,for whom this is the second stint at RBI as Deputy Governor,was known for speaking his mind. Besides advocating a tough monetary stance internally,he has also been averse to letting the central bank divest itself of the responsibility to manage the government’s debt.