The governor and the Goldilocks equation: Malhotra's first-year reforms

Sanjay Malhotra has made structural changes to banking regulation to bring down costs and increase efficiency. Plus, he kicked off a benign interest regime. But there are challenges ahead

During his second monetary policy press meet in April this year, Reserve Bank of India (RBI) governor Sanjay Malhotra observed that while his name is Sanjay, he is not the Sanjaya of Mahabharata to be able to predict the future. “I do not have that divine vision that he had, but we will jointly try to manage the growth and the inflation dynamic in our country,” he said when asked if monetary policy has to do the heavy lifting to support the economy.

 

What he did not mention was his understanding of macro-economic conditions and financial sector challenges.

 

When he