RBI's Former Governor S Venkitaramanan Is No More
Moneylife Digital Team 18 November 2023

Reserve Bank of India (RBI)'s former governor, S Venkitaramanan, passed away Saturday morning in Chennai due to illness. The 92-year-old officer from the Indian Administrative Service (IAS) is survived by his two daughters, Girija and Sudha, and their families. Mr Venkitaramanan was RBI governor during the economic crisis in 1990-92.

Two weeks after Mr Venkitaramanan became RBI's 18th governor, India was close to a default on foreign loans. The foreign exchange reserves were down to just US$1.1bn (billion) or two weeks of imports. Mr Venkitaramanan, as RBI governor, mounted a strong rescue package, like selling gold and putting a draconian credit squeeze on importers. It was a critical battle to retrieve the creditworthiness of a rudderless country. The battle was marshalled by Mr Venkitaramanan. Of course, the crisis was created by the excessive short-term borrowing made by the Rajiv Gandhi government, of which Mr Venkitaramanan was a key member.

As mentioned by Debashis Basu and Sucheta Dalal in their book 'The Scam', Mr Venkitaramanan was installed as the governor of RBI on 22 December 1990 by the then prime minister (PM) Chandra Shekhar. "The appointment was part of a deal struck by the Shekhar government with a powerful business house, which had reasons to be beholden to Mr Venkitaramanan. For Mr Venkitaramanan, who was the union finance secretary between 1986 and 1988, this brought a long-standing dream to reality. It also gave RBI a chance to reform itself after successive governors had turned it bureaucratic and insular. Mr Venkitaramanan was perhaps the first governor who was, unlike the earlier three (including then finance minister Manmohan Singh), keen on listening to the market."

"When Mr Venkitaramanan became the governor in December 1990, for the first time in decades, an RBI governor was using market intelligence. This is owed to his very long and colourful career as a civil servant. Mr Venkitaramanan, the son of a poor school teacher, was a leftist activist in his college days. So, despite topping the civil service examination, he was not given a posting. He appealed to the then chief minister of Tamil Nadu, who in turn called up the prime minister Jawaharlal Nehru. PM Nehru ordered that Mr Venkitaramanan be immediately inducted into the cadre. Since then, he has had a varied career shaped by his close contacts with businessmen and politicians. He has been particularly close to AC Muthiah, the Ambanis of Reliance Industries, the Hindujas and Rajiv Gandhi, often taking decisions that seemed to favour them. His chief instincts have been to keep his ear to the ground and to act fast and decisively," the book says.

During his tenure as RBI governor, the infamous Harshad Mehta scam was exposed by Moneylife's managing editor, Sucheta Dalal, who was working with the Times of India (ToI) at that time.

Mr Venkitaramanan has had a distinguished career and held several key positions in both the state and central government. He had the distinction of holding the post of finance secretary in a state as well as in the Union government. In March 1969, a month after M Karunanidhi became chief minister of Tamil Nadu, Mr Venkitaramanan was made finance secretary and held the post till June 1974. Eleven years later, in February 1985, he became finance secretary in the Union government and served there for four years.

Earlier in his service, between the end of 1962 and 1966, he served as private secretary to the then Union minister C Subramaniam and was a member of the team that oversaw the implementation of the Green Revolution programme.

While in the state government’s service, he also held the post of vice-chairman and president of Southern Petrochemical Industries Corporation (SPIC) during 1977-83.

After retirement, Mr Venkitaramanan served as the chairman of Ashok Leyland Investment Services Ltd, New Tirupur Area Development Corporation Ltd and Ashok Leyland Finance Ltd. He also served on the boards of several companies, including Reliance Industries Ltd (RIL), Piramal Healthcare Ltd, Tamil Nadu Water Investment Co Ltd and Housing Development Finance Corp Ltd (HDFC).

Mr Venkitaramanan published three books, 'Indian Economy: Reviews And Commentaries - Vol I', 'Indian Economy: Reviews And Commentaries - Vol II', and 'Indian Economy: Reviews And Commentaries - Vol III'.

Mr Venkitaramanan was born in Nagercoil town in the Padmanathapuram division of the princely state of Travancore to a Tamil Iyer family. He completed his master's degree in physics from University College Thiruvananthapuram in Kerala. He earned a master's degree in Industrial Administration from Carnegie Mellon University Pittsburgh in the US.  

His daughter Girija Vaidyanathan — a 1981 Tamil Nadu cadre IAS officer — served as the chief secretary of Tamil Nadu.

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