RBI Governor Shaktikanta Das' 10 Bold Moves That Redefined RBI's Legacy

Shaktikanta Das, the 25th Governor of the Reserve Bank of India (RBI), assumed office in December 2018 during a time of economic uncertainty.

Over his transformative tenure, Das faced numerous challenges, including the aftermath of the IL&FS crisis, the economic fallout of the COVID-19 pandemic, and global financial instability, as reported by CNBC TV.

Photo Credit: PTI

Despite these challenges, Das steered the RBI through turbulent times with decisive reforms and visionary leadership. As his six-year term ends on December 10, let's take a look at the top 10 key decisions that defined his time as RBI Governor:

1. Stabilizing the NBFC Sector Post-IL&FS Crisis

When Das took office, the Non-Banking Financial Companies (NBFC) sector was reeling from the IL&FS crisis. The RBI took decisive steps to restore liquidity, strengthen governance, and rebuild investor confidence. Special liquidity facilities were introduced for solvent but liquidity-strained NBFCs, and tighter regulations were enforced to improve risk management and transparency in the sector, as reported by CNBC TV.

2. Historic Rate Cuts & Pandemic Relief Measures

In response to the economic disruptions caused by the COVID-19 pandemic, Das oversaw historic rate cuts, with the repo rate falling to a low of 4%. The RBI also introduced a moratorium on loans, providing relief to borrowers. The central bank launched targeted long-term repo operations (TLTROs) to inject liquidity into stressed sectors such as MSMEs and NBFCs, helping them navigate the crisis.

3. Promotion of UPI & Digital Payments

Under Das’ leadership, the RBI placed a strong emphasis on the digitization of payments. The expansion of UPI (Unified Payments Interface), including its international reach, made India a global leader in digital payments. UPI 2.0 and UPI LITE introduced new features that encouraged wider usage, including for small-value transactions in rural areas, as reported by CNBC TV. This pushed India toward a cashless economy, supporting financial inclusion on an unprecedented scale.

4. Tightening NBFC Regulations

Following high-profile defaults like IL&FS and DHFL, Das implemented stricter regulations for NBFCs. The introduction of scale-based regulations in 2021 categorized NBFCs into four groups, with larger entities facing more stringent requirements. This move was essential to curbing systemic risks and ensuring the stability of the financial system.

5. Overhaul of Cooperative Banks

Das initiated major reforms within the cooperative banking sector, especially after the PMC Bank scam exposed deep governance issues. The RBI introduced a robust supervisory framework, emphasizing stricter capital requirements, regular audits, and improved management practices to enhance the financial health and transparency of these banks.

6. Launch of Central Bank Digital Currency (CBDC) Pilot

Shaktikanta Das championed India’s foray into the realm of digital currencies. In 2022, the RBI launched pilot programs for the Digital Rupee (CBDC) in wholesale and retail segments. These pilots aimed to reduce dependency on physical cash, enhance payment efficiency, and integrate blockchain technology into India’s financial ecosystem.

7. Overhauling Private Bank Ownership Rules

In a bold move to diversify the ownership structure of private banks, Das introduced new guidelines in 2021. The new regulations stipulated that promoters of private banks must reduce their stake to below 26% within 15 years. The rules also aimed to curb excessive control by a few entities and improve transparency in banking operations, as per media reports.

8. Revamping Fintech & Digital Lending Regulations

As the fintech and digital lending sectors exploded in India, Das ensured these platforms operated within a safe and transparent regulatory framework. In 2021, the RBI issued new guidelines for digital lenders, requiring them to register with regulated entities like banks or NBFCs and mandating better data protection and fair lending practices.

9 . Crackdown on Non-Compliance

Das’s tenure saw a no-tolerance approach toward financial entities not adhering to regulatory norms. The RBI took strong action against non-compliant entities, including banks like HDFC and global payment companies such as MasterCard and American Express. This regulatory clampdown reinforced the importance of consumer protection and strict adherence to banking norms, as per media reports.

10. Withdrawal of ₹2,000 Notes

In a surprising yet smooth move, the RBI under Das’s leadership began withdrawing ₹2,000 notes in May 2023. The process was significantly more orderly compared to the chaos during demonetisation. By November 2024, ₹3.56 lakh crore of ₹2,000 notes had been returned, with only ₹6,839 crore remaining in circulation. The RBI continues to facilitate the deposit and exchange of these notes.

Conclusion

Shaktikanta Das's tenure as the RBI Governor has been marked by decisive leadership, strategic reforms, and innovative approaches to strengthening India's financial ecosystem. Whether it was managing economic challenges, promoting digital payments, or stabilizing key sectors, his contributions have been pivotal in shaping the modern Indian economy. As his term concludes, the legacy of his leadership will continue to influence India’s financial landscape for years to come.