"This is a recognition of the part the Reserve Bank of India and its staff have been playing in bringing macroeconomic stability to the Indian economy, in creating more competition and new growth opportunities in the banking and financial markets, as well as in expanding financial inclusion," Dr Rajan, a former chief economist at the International Monetary Fund, said in a statement. (Read)
The jury cited Dr Rajan's "disciplined and focused approach" to tackling macroeconomic instability, his "deep understanding" of the root causes of economic problems and an "impressive leadership style" as reasons for him winning the award.
He had earlier won the "Best Central Bank Governor" award for 2014 by Euromoney magazine. A celebrity economist known across the globe for predicting the 2008 global meltdown, Dr Rajan has also won praise from India baiters such as commodity guru Jim Rogers.
I wish the RBI was running the American central bank. Your central bank has not been great but it has been a lot better than many other central banks... the people there at least understand the problem," Mr Rogers told NDTV in December. (Read the full story here)
51-year old Dr Rajan has been credited with stabilising the rupee and controlling stubbornly-high inflation that rocked India's economy for the last three years.
Within a month of him taking over the reins of RBI in September 2013, the rupee recovered from 68 per dollar to 62 per dollar. Consumer price inflation fell from an all-time high of 11.16 per cent in November 2013 to a record low of 4.38 per cent in November 2014.
Inflation edged up to 5 per cent in December 2014 as the base effect advantage wore off, but the rise was less-than-expected and is within RBI's January 2016 inflation target of 6 per cent.
Dr Rajan has been at the forefront of the much-needed reforms in public sector banks, where bad assets have risen to 12.9 per cent of advances as on September 30, 2014. The same ratio for private sector banks was at 4.4 per cent.
There is now a new mechanism for early detection of stressed assets and a central repository of information for large borrowers to check defaults. More debt recovery tribunals and stringent bankruptcy laws for speedy disposal of cases involving stressed assets may soon be on their way.
Dr Rajan has pitched for higher salaries and fixed tenures for bankers; he has often spoken against crony capitalism and unscrupulous promoters too. (Read)
The Central Banking jury also singled out Dr Rajan for his "forthright observations" about some of the less welcome developments in the global economic, financial and monetary system.
Dr Rajan has often questioned if "more stimulus is the answer" to global economic woes and called for greater monetary cooperation among big industrialised nations.
Unsurprisingly, Dr Rajan, along with PM Narendra Modi, figures in most economic discourses about India. "India remains a consensus favourite both as an absolute and relative play due to a trinity of factors - business-friendly Modi government; pro-active RBI Governor Raghuram Rajan and commodity tailwinds," said Citigroup recently. (Read the full story here)