The Reserve Bank of India (RBI) has had 25 governors to date. Notably, 14 of these governors were civil servants. In recent years, governments have increasingly preferred to appoint civil servants over professional economists to lead the central bank.

Sanjay Malhotra, a 56-year-old civil servant, has been appointed as the new governor of the RBI for the next three years, effective December 9, 2024. He will be the 15th civil servant and the 26th governor to helm the RBI. Currently, Malhotra serves as India’s Revenue Secretary. He succeeds Shaktikanta Das, who has completed a six-year term as the governor.

Malhotra’s appointment is viewed as a move to enhance coordination between fiscal and monetary policies by placing public servants at the helm of the central bank. He has fostered a positive relationship with Finance Minister Nirmala Sitharaman, which suggests a promising future for coordination between the RBI and the government.

In 1990, he joined the prestigious Indian Administrative Service from the Rajasthan cadre. Throughout his career, he has maintained a low profile.

During his first interaction with the media as the governor, he hinted at maintaining stability while adapting to changing scenarios.

After Malhotra’s appointment, bond yields decreased, and the rupee weakened. Due to slowing economic growth and persistent inflation, lower interest rates are anticipated when the RBI reviews its policy in February 2025.

Malhotra is known in the federal finance ministry for his data-driven approach, and for trying to develop predictive models for government tax revenue. He also addressed contentious issues like taxing online gaming companies and other pending taxation issues.

He led the Financial Action Task Force’s evaluation of India, which helped to attain favourable ratings for the country, and led the department that oversaw the listing of the Life Insurance Corporation.

While the RBI banned cryptocurrencies, the finance ministry under Malhotra has sought to recognize them by requiring virtual digital asset service providers to register with the Financial Intelligence Unit. Malhotra holds a Master’s in Public Policy from Princeton University in the USA and is also a graduate of Computer Science Engineering from the Indian Institute of Technology.   

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