Y. Venugopal Reddy

Yaga Venugopal Reddy
21st Governor of Reserve Bank of India
In office
6 September 2003  5 September 2008
Preceded by Bimal Jalan
Succeeded by Duvvuri Subbarao
Personal details
Born (1941-08-17) 17 August 1941
Kadapa, YSR District, Andhra Pradesh,India [1]
Nationality Indian
Alma mater Madras University
Osmania University
Occupation Civil servant

Dr. Yaga Venugopal Reddy, better known as Y. V. Reddy (born 17 August 1941) is an Indian Administrative Service (IAS) officer of the 1964 batch who served as Governor of the Reserve Bank of India (RBI) (India's central bank) from 6 September 2003 until 5 September 2008.

In 2010, he was awarded India's second highest civilian honour, the Padma Vibhushan.[2]

Education and honours

Reddy received his M.A. in economics from Madras University, India. He holds a PhD from Osmania University, Hyderabad. He also holds a Diploma in Economic Planning from the Institute of Social Studies, Netherlands.

Reddy was awarded Doctor of Letters (Honoris Causa) by Sri Venkateswara University, India; and Doctor of Civil Law (Honoris Causa) by the University of Mauritius.

On 17 July 2008 Reddy was made an Honorary Fellow of the London School of Economics.

Dr Y.V.Reddy former Governor of RBI and chairman of 14th Finance commission,did his matriculation in Bellary, Karnataka.

Positions held

Venugopal Reddy was appointed the twenty-first Governor of the Reserve Bank of India on 6 September 2003 and served in that position for five years.

In 1996, Reddy had been appointed deputy governor of RBI. He has also worked with the International Monetary Fund as Executive Director in 2002. Prior to joining the IAS, he worked as a lecturer from 1961.

Reddy was Chairman of the Bank for International Settlements, Asian Consultative Council (ACC) for a term of two years from March 2007. He was the Chairperson of SAARCFINANCE, a Group of Governors of the central banks of SAARC member countries. He has held the positions of Secretary (Banking) in Ministry of Finance and Principal Secretary in Government of Andhra Pradesh and has worked with the governments of China, Bahrain, Ethiopia and Tanzania. He has been a Visiting Fellow, London School of Economics, a full-time UGC Visiting Professor in Department of Business Management, Osmania University; full-time Visiting Faculty, Administrative Staff College of India and continues to be the Honorary Senior Fellow at Centre for Economic and Social Studies at Hyderabad. Reddy was also Distinguished Professor of the Indian Institute of Technology Madras.[3] Reddy was Member of The Commission of Experts of the President of the UN General Assembly on Reforms of International Monetary and Financial System. In addition to the Chair, Professor Joseph Stiglitz (USA), members of this UN Commission were drawn from Japan, Western Europe, Africa, Latin America, South and East Asia.[4] Reddy was President of The Indian Econometric Society during 2011.[5] Reddy was on the Advisory Board of Institute for New Economic Thinking (INET). The INET advisory board includes Nobel laureates as well as other prominent economists.[6] Reddy was on International Advisory Board of the Columbia Program on Indian Economic Policies, Columbia University, New York. He was a Member of an informal international group of prominent persons on International Monetary Reforms. He was also on Advisory Group of eminent persons to advise the Finance Minister of India on G-20 issues.[7] Reddy was elected as Conference President of the Indian Economic Association (IEA) for the year 2014.[8]

He is the Chairman of the 14th Finance Commission of India since 3 January 2013.[9]


Reddy has worked on piloting a calibrated approach to financial sector reforms. A 19 December 2008 article in the New York Times has credited the tough lending standards he imposed on the Indian banks as RBI Governor for saving the entire Indian banking system from the sub-prime and liquidity crisis of 2008.[10] At the Reserve Bank, he was Member-Secretary of two high level committees: one on Balance of payments and the other on Public Sector disinvestments. Dr. C. Rangarajan, former Governor, Reserve Bank of India headed both the committees. Reddy was also a member of the Reserve Bank of India's Policy Group on External Debt Statistics. Reddy is credited to have played a crucial role in framing macro-economic policies that helped quarantine the country from the domino effect of the financial crisis encountered by the South-East Asian countries during the later part of the 1990s.[11] He, along with Dr. C. Rangarajan, is also credited with the formulation of the course to be steered by the country to come out of the then Balance of Payments crisis.

In the Indian context, he was the first to use the term ‘Financial inclusion in April 2005 in his Annual Policy Statement as Governor of the Reserve Bank of India.[12] Later on, this concept gained ground and came to be widely used in India and abroad. While recognising the concerns in regard to the banking practices that tend to exclude rather than attract vast sections of population, banks were urged in the Annual Policy Statement to review their existing practices to align them with the objective of financial inclusion.[13]

As Governor, he saw his job as making sure Indian banks did not get too caught up in the bubble mentality. He banned the use of bank loans for the purchase of raw land, and sharply curtailed securitisations and derivatives, and essentially prohibited off-balance sheet financing. He increased risk weightings on commercial buildings and shopping mall construction and increased bank reserve requirements.[10] In one of his interview, Joseph E. Stiglitz, Professor of Economics at Columbia University and Nobel Laureate, had said 'If America had a central bank chief like Y.V. Reddy, the US economy would not have been in such a mess.' [14] Less well-discussed is his work on rural banking, particularly on reviving co-operative banks and his focus on the common person. His term was marked by an emphasis on financial inclusion with the aid of information technology. He is widely consulted on many financial issues by institutions both in India as well as the world over.[15]

Reddy authored a book titled "India And The Global Financial Crisis : Managing Money and Finance" published by Orient Blackswan in 2009. This book which provided insights into the making of public policies across a spectrum of areas between the years 2003 and 2008, a period of rapid growth of the Indian Economy as well as extraordinary challenges for the conduct of monetary policy was among the best sellers in India.[16] His book titled "Global Crisis, Recession and Uneven Recovery" (Orient Blackswan, 2011) was a sequel to 2009 bestselling work. It provided a thinker and experienced policymaker's understanding of the genesis, anatomy and impact of the financial crisis, and of the lessons it offered. The book highlighted that one of the consequences of the crisis is the shift in the balance of economic power in favour of Asia. Also, it highlighted the role of central banks in the evolution of the global financial crisis, in particular the role played by central banks in developing countries. Erudite discussions on India’s experience in regulating the financial sector and the need for reform in India’s financial sector in the light of global debates are some of the key features of this book.[17] His most recent book was on "Economic Policies and India's Reform Agenda: New Thinking" (Orient Blackswan, 2013). Navigating through the debates between 2010 and 2012 on the continuing global financial crisis, this book reflected the confidence of Reddy who steered the nation’s banks to safer waters. In this book, Reddy seeks a change in economic thought and policy-making. Arguing for a three-fold shift in the discipline, he calls for broadening the focus of policy-makers, improvisation in the tools employed by economists and an emphasis on empirical evidence. This ‘new thinking’, he says, will contribute to India’s accelerated development.[18]

Reddy was invited to deliver the prestigious The Per Jacobsson Foundation Lecture in June 2012 at the Bank for International Settlements in Switzerland. In this lecture on Society, Economic Policies and the Financial Sector, the main message he gave was that society has put its trust in central banks and as such it expects central bank to ensure trust and confidence in money and finance and serve the interest of the masses.[19]

Timothy Geithner, Former US Secretary of the Treasury and President of Federal Reserve Bank of New York, in his book Stress Test: Reflections on Financial Crises, published in May 2014, wrote about his brief encounter with India’s former Central Bank Governor Y.V. Reddy who gave him a copy of "Complications: Notes from the Life of a Young Surgeon" by Atul Gawande. [Reddy] told me it was the best book I would ever read about central banking, and the parallels with financial crisis management really are striking. It’s about making life-or-death decisions in a fog of uncertainty, dealing with the constant risk of catastrophic failure.[20] Later while talking with Martin Wolf during his lunch with the Financial Times, Geithner mentions "It was a fascinating book, in part because he [Gawande] described how in that profession they do things that in economics we don’t that well. They have these things they call morbidity and mortality reviews every Friday, where they go over mistakes." [21] This story received mention in several book reviews. In a book review, Sam McNerney notes Reddy’s recommendation is surprising but sensible. Gawande, a surgeon by trade, has knack for elucidating the inefficiencies of modern medicine and contrasting hospital management with business management.[22] In another review of this book, Eric Warters write "To be clear, this book has absolutely nothing to do with central banking, at least not on the surface of it. This book is Dr. Gawande’s retellings of myriad medical emergencies he encountered as a surgeon and how he managed the stress, uncertainty, and challenges that they brought on. For Geithner, the parallels were striking, as both men had to act quickly with limited information, sometimes on a hunch, with dire consequences at stake." [23]

In this path breaking Presidential Address on "A Tale of Two Commissions and Missing Links" at 97th Annual Conference of the Indian Economic Association (IEA) in Udaipur on December 27, 2014, Reddy dwelt at length on the origin, evolution, linkages, achievements, limitations and the debates relating to the two major commissions on economic affairs in India. He also cited the success of the Chinese model where the concept of ‘plan’ had been replaced by ‘guideline’ in the country’s 11th Five Year programme. He noted "The change led to China’s transition from a Soviet-style planned economy to a socialist market economy and gained greater responsibility and power in overseeing China’s economic development".[24]


Dr Reddy often courted controversy for deliberately guiding the Indian Rupee lower through verbal intervention.[25] Some of his media talks were perceived as ill timed.[26]

In December 2003, Dr Reddy was dragged into a controversy, when someone impersonating him called the then Regional Director of RBI Bhopal, Mrs. Uma Subramaniam and asked her to lend INR 20 lakhs [USD 28,000] for a personal emergency. Subramaniam was able to collect only INR 9,00,000 by various means which included coercing her staff members. She then handed over the money to an accomplice of the impostor. She did not get back to Dr. Reddy regarding this incident. The sensational fraud rocked and embarrassed the RBI, and infuriated Dr Reddy, who insisted on a full inquiry. [27]


  1. http://www.hss.iitm.ac.in/oldwebarchive/yvreddy/index.html
  2. "This Year's Padma Awards announced" (Press release). Ministry of Home Affairs. 25 January 2010. Retrieved 25 January 2010.
  3. http://www.iitm.ac.in/content/dp
  4. The Commission of Experts of the President of the UN General Assembly on Reforms of the International Monetary and Financial System; United Nations; http://www.un.org/ga/president/63/commission/members.shtml
  5. The Indian Econometric Society; Conferences held; http://www.tiesindia.net/conference_held.html
  6. Innovative Thinkers Join Forces To Meet Challenges of Global Economic Crisis; Institute of New Economic Thinking (INET), Press Release; http://ineteconomics.org/press-release/innovative-thinkers-join-forces-meet-challenges-global-economic-crisis.[]
  7. Institute for New Economic Thinking; "Archived copy". Archived from the original on 14 January 2014. Retrieved 13 January 2014.
  8. http://www.indianeconomicassociation.com/download/newsletter2014.pdf
  9. "Y V Reddy to head 14th Finance Commission". Business Standard. 3 January 2013. Retrieved 17 January 2014.
  10. 1 2 "How India Avoided a Crisis – Joe Nocera". New York Times. 20 December 2008. Retrieved 20 December 2008.
  11. " Y.V. Reddy appointed RBI Governor for five-year term" The Hindu Business Line, 19 July 2003
  12. "Archived copy". Archived from the original on 6 January 2016. Retrieved 6 April 2015.
  13. The Report of the Internal Group to Examine Issues relating to Rural Credit and Microfinance (Chairman: Shri. H. R. Khan), Reserve Bank of India, July 2005 (Khan Committee); "Archived copy" (PDF). Archived from the original (PDF) on 10 June 2012. Retrieved 5 April 2015.
  14. In India, Central Banker Played It Safe; New York Times, June 25, 2009; http://www.nytimes.com/2009/06/26/business/global/26reddy.html
  15. "Don't write off the US economy yet" The Hindu, 18 August 2011
  16. "Archived copy". Archived from the original on 2 February 2014. Retrieved 22 January 2014.
  17. "Archived copy". Archived from the original on 2 February 2014. Retrieved 22 January 2014.
  18. "Archived copy". Archived from the original on 2 February 2014. Retrieved 22 January 2014.
  19. http://www.perjacobsson.org/lectures.htm
  20. Timothy F. Geithner, Stress Test: Reflections on Financial Crises, May 2014
  21. Lunch with the FT: Tim Geithner ;By Martin Wolf, Financial Times, May 15, 2014. http://www.ft.com/cms/s/2/2e13cb90-dabb-11e3-8273-00144feabdc0.html#axzz3JrTe7V1O
  22. The One Book That Helped Timothy Geithner Navigate the Financial Crisis - By Sam McNerney, August 11, 2014, http://250words.com/2014/08/the-one-book-that-helped-timothy-geithner-navigate-the-financial-crisis/
  23. Eric Warters, Finance Professional, Book Review: "Complications" by Atul Gawande; http://ericwarters.com/complications/[]
  24. http://udaipurtimes.com/travelling-much-dark-says-rbi-chief-raghuram-rajan/
  25. "Reddy and Subbarao manipulated Rupee".
  26. "Rupee Bulls hear message from Reddy".
  27. "Opaque RBI rewards charge-sheeted official".
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