Former governor of the Reserve Bank of India, S Venkitaramanan, who helmed the central bank in the crucial crisis years of 1990-91, passed away today after a brief illness. He was 92 and is survived by his two daughters, Girija and Sudha, and their families. 

Even before Venkitaramanan took over as the Governor of RBI in 1990, India was already headed towards a balance of payment wobble, which was exacerbated by the first Gulf War and the consequent increase in oil import bill (from $2 b to $ 5.7 b). As the Finance Secretary, Venkitaramanan tried in vain to stave off the impending doom, partly by introducing the then IMF chief, Michel Camdessus, to the then Prime Minister, Rajiv Gandhi, for approval for an IMF loan. 

It is well known today how a concatenation of events, such as the first breakdown of the USSR, the first Gulf War and a slowdown in Europe, threw India into its worst-ever BoP crisis, with just $ 1.1 billion of forex reserves and how Venkitaramanan (along with Prime Minister Chandrasekhar and Finance Minister, Yashwant Sinha), saved the country by taking a bold decision to pledge gold to raise $500 million. 

Venkitaramanan’s role in managing the crisis is well acknowledged, but less realised is that, because of frequent changes of the guard of the Union government, it befell upon the RBI to raise funds frequently. Venkitaramanan is known to have been brusquely dismissed within 30 seconds by Japan’s foreign minister in Tokyo when he went to seek funds. 

Venkitaramanan’s successor at the RBI, Dr C Rangarajan, recalls that one financial commentator described Venkitaramanan as a “loan ranger” during those times. 

Speaking to businessline today, Rangarajan recalled Venkitaramanan’s “courage” in taking tough decisions and his willingness to listen to opposing views. Rangarajan said Venkitaramanan was also the first to initiate banking and exchange rate reforms.