Baptism by fire: Subbarao on early days as RBI governor

Former RBI governor admits to being a 'greenhorn' as he started his stint at the central bank.

"It was baptism by fire," Duvvuri Subbarao said as he recounted his early months as governor of the Reserve Bank of India in 2008, a time when Lehman Brothers collapsed and pushed the global financial sector into a "near death" experience.

"I was plunged into crisis management even before I could settle into the job," Subbarao said in Singapore at the launch of his book Who Moved My Interest Rates.

The 66-year-old former RBI governor admits to being a "greenhorn" as he started his five year stint at the central bank during what were turbulent times both in India and around the world.

Subbarao was the RBI's 22nd governor, from September 5, 2008 till September 4, 2013.Launching the book at the South Asian Diaspora Conference in Singapore, the civil servant and economist said his five-year term was marked by one crisis after another.

Even as India recovered from the crisis sooner than most other emerging markets, there was hardly any respite as the Reserve Bank had to battle a decade-high inflation.

In the final year of his tenure, he had to mount a defence of the exchange rate which fell steeply as a result of the taper tantrums.

The objective of the book, Subbarao said, is not so much to defend his record or establish his legacy, but to explain the circumstances in which acted.

The book is also an attempt, said Subbarao, to demystify the Reserve Bank, so that people understand what the Reserve Bank does and how it impacts their lives.

"Only when there is such broad-based understanding can people hold the Reserve Bank to account for results."

"To believe that the RBI is fixated on inflation and does not care about growth is wrong," the former governor asserted.

The RBI tries to maintain price stability, low and steady inflation, which, he added, is a necessary condition for sustainable growth.