It’s important one grows a thick skin fast: RBI Governor

Patel, who took over the reins of the RBI just two months before the note ban, said the remonetisation has been done at a “very quick” pace and the central bank has managed to bring the situation to normal. “I think that it is important that one grows a thick skin fast in this business and I think we have done that. We have gone about our work, we had undertaken major challenges during these past few months and valid criticism is something that we are open to and we take it in the spirit in which it is given and try to improve ourselves,” he said in an interview. 

He said everyone agrees that not just the RBI, but the wider banking system has done a “Herculean job” over the last few months when there were many challenges. On the impact of demonetisation on the economy, Patel said: “Almost everyone agrees that the impact is going to be a sharp ‘V’, that we would have a downgrade of growth for a short period of time.” He added: “However, the remonetisation has happened at a fast pace and that was part of the plan that subsequent to the withdrawal of the specified bank notes, our production plans and supply processes would ensure the remonetisation happened as quickly as possible, which given our capacity in terms of printing currency notes is at a high level.” 

RBI last week lowered its economic growth forecast for the current fiscal to 6.9 per cent from the previously projected 7.1 per cent, but saw it bouncing back in a big way to 7.4 per cent in 2017-18. 

Patel said the benefits of junking 86 per cent of currency in circulation, effected on November 9 last year, will take time to fully play out and needs more work to ensure they are lasting. 

Asked when India could achieve 9 per cent GDP growth, Patel said it is difficult to predict sustainable growth rates. Higher growth rate is possible if very fundamental reforms, especially in factors of production like land and labour, are undertaken, the Governor said.