After a 39-year stint, Shyamala Gopinath, Deputy Governor of Reserve Bank of India (RBI), stepped down recently. As Deputy Governor, she was in charge of not only the entire portfolio of the monÂetary policy, but also its internal debt departÂment as well as the external investÂments operations.
Gopinath, who holds a master's degree in Commerce, joined the RBI as an officer in April 1972, and has worked in different capacities including Executive Director of RBI from June 2003 until her elevation to the position of Deputy Governor. She has also handled some of the critical portfolios in the Reserve Bank, such as, financial markets, including regulation and management of government debt and exchange rate, management of foreign exchange reserves, and banking regulation and superÂvision. The most challenging time during her tenure was 1991, when there was large- scale withdrawal of forÂeign deposits and India's reserves came down moreover, she believes that manÂaging government borrowing was always a tough job, especially during a crisis. But her strengths of regulation, supervision and inspection helped the situation.
In a move to improve the funding in infrastructure projects in India, Gopinath played an important role in easing the regulatory limits on corporate bonds and infrastructure bonds to open credit windows for the corporates. In the context of FII debts, she believes that RBI is restrictive to control the vulnerability from short term debt. However, the regulator would maintain macro stability through a differential mechanism, including interest rate, FII investment and control of debt. A liberal of sorts, she believes the current emphasis on securitisation is overrated, and believes that the entire decision to lend should not be based on the security.