MUMBAI, Nov 7: The end of Chakravarthy Rangarajan's innings as governor of the Reserve Bank of India will mark the close of one of the most eventful chapters in the history of the country's central bank.

Rangarajan, who became the governor in December 1992 after a short stint with the Planning Commission, has guided the country's central bank through the most crucial phase in the history of Indian banking when financial sector reforms were underwary. Having sucessfully completed what he calls "the first phase of reforms" in the banking sector, Rangarajan-known for his gradualism-will hand over the governor's baton to a new incumbent: noted economist and a senior member of the planning commission, Bimal Jalan.

A Master's from Madras University and a doctor in Economics from the University of Pennsylvania, USA, Rangarajan took over as deputy governor, RBI in 1982 after a professorial stint at the Indian Institute of Management, Ahmedabad. Since then, he has widely come to be accepted as a key architect of the country's reform programme, and rated as one of the best central bank governors in the world by Global Finance magazine. This is what Global Finance said about Rangarajan: "Prime Minister Narasimha Rao and his finance minister Manmohan Singh got lot of kudos for liberalising India's economy. But Rangarajan is the unsung hero: he authored the convertibility of the rupee, a policy central to India's reforms..."Describing him as "one of the cleverest economists of his generation", the magazine said: "Rangarajan exhibits a good mix of caution, prudence and innovation-but lacks the strong independent streak that characterises the best central bankers."

Credit must be given to Rangarajan for the manner in which he has steered the financial system and the banking sector from the abysmal situation that obtained in the early part of his charge as governor, Reserve Bank of India.Rangarajan donned the mantle of governor after having inherited a none too robust economy, reeling under the twin attacks of bankruptcy and the securities scandal from an equally illustrious predeccesor, S Venkitaramanan.

As the curtain comes down on his term as charge de affairs at the country's central bank, the various measures undertaken during his dispensation leaves us with forex reserves over $30 billion, an inflation level veering around four per cent and a vastly improved and competitive banking sector.

Posterity will bestow the credit to Rangarajan for deregulation of interest rates, reduction of statutory exemptions on banks, freeing up the money and forex markets, inflation-control, revitalising state-run banks and infusing competition by allowing newer players in the banking sector.

As a three-year term and two one-year extensions later the `good doctor' prepares to give up his office on Mint Road to Bimal Jalan, one can't but help wonder how the monetary economist will fit into the hurly burly of politics and constitutional demands in his new capacity as governor, Andhra Pradesh.

Change is permanent, but the industry will miss Chakravarthy Rangarajan.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.