What does it take to lead the central bank?

It is very essential for the Governor of the Reserve Bank of India to have a personality of a hawk or a dove. Over the years, 22 Governors have been classified as one or another. A few have taken remarkable measures turning the economy upside down while some have tried to hold the fort down through a storm.

The last Governor to head the RBI was most certainly a hawk, both in and out of office. To take his place, the government appointed someone who classifies neither as a hawk nor a dove. He brings a wave of change because the market believes he is an owl; silent and wise.

They share a similar educational background and work experience but even then when they talk, people listen differently.

· Raghuram Rajan pursued an MBA from IIM-A and then went on to get a PhD from the Massachusetts Institute of Technology. Urjit Patel graduated with a B.Sc in Economics from the University of London and later pursued an M. Phil from Oxford University and a PhD from Yale University.

· Rajan has been a Professor of Finance at the University of Chicago since 2006. He has been the Economic Counselor and Director of Research at the International Monetary Fund and an Economic Adviser to the Prime Minister of India. He served as the 23rd Governor of the RBI and said that it was only a side job for him. No one but Rajan could say that so casually.

· Patel has been the Executive Director and Member of the Management Committee of IDFC. He was a Deputy Governor at the RBI and the President of Reliance Industries before being appointed as the 24th Governor of the RBI.

· Rajan has authored ‘Fault Lines’ which talks about the Global Financial Crisis and co-authored ‘Saving Capitalism from the Capitalists’. Patel has more than 30 papers and publications to his name and he has written numerous coloumns for the Business Standard and the Economic Times.

· Rajan found a lot of supporters when an extension of his term was being debated. Many bankers and his peers came forth asking for him to stay in office. He was however not supported by the government unlike his successor. Patel has a recommendation letter from Dr. Manmohan Singh that says, “He is very important for the country.” Who wouldn’t support a man like that? The Modi Government was especially pleased with his appointment; some even say it’s because he’s not as outspoken as Rajan.

Both these Governors have good reasons for being where they are; they carry with them a powerful persona that enters the room long before they do. Their dapper suits and a no nonsense attitude, only makes it harder for people to miss their presence.

There are a lot of similarities between these men and what separates a hawk from an owl, only time will tell.

Patel is a man of few words. He believes in maintaining a low profile and shies away from the public. Rajan on the other hand is known for making some memorable statements.

Here’s a list of some of his famous quotes-

I’m no Bond. I’m a banker on the move.

Not taking risks one doesn’t understand is often the best form of risk management.

I don’t know what you want to call me… Santa Claus… you want to call me hawk, I don’t know. I don’t go by this. My name is Raghuram Rajan and I do what I do.

Politicians today vow, “Never again!” But they will naturally focus only on dealing with a few scapegoats, not just because the system is harder to change, but also because if politicians traced the fault lines, they would find a few running through themselves.

I am an academic, RBI Governor was a side job

Both our governors share business ideologies, but how they act upon it is as different as night and day. While Rajan believes in being vocal about his opinions and doesn’t limit them to the banks; Patel prefers to keep to himself especially in matters of the banks he oversees.

But no matter where they come from, the policies they implement, and where they go, the markets will look after themselves.