D Subbarao’s advice to Raghuram Rajan—concentrate on lunch menus not interest rates

My last day as governor of the RBI—marking an end to five turbulent years at the helm of that great institution.

Real-life events do not respect leadership transitions. The last couple of months of my tenure had gone completely off-script. I thought that would be the time when I would travel around and visit the Reserve Bank’s regional offices across the country and walk around the central office departments to reminisce and rejoice with others over our time together. I particularly wanted to reach out to the middle- and junior-level staff of the Reserve Bank, who usually operate below the governor’s radar but whose ideas, insights and perspectives had influenced me more than they realized. In the event, I was so preoccupied with managing the exchange rate crisis triggered by the ‘taper tantrums’ that my last day in office had arrived almost as abruptly as my first day as governor.

At 11 a.m., I spoke to the entire Reserve Bank staff across the country via a video link-up and told them that I would carry many, many pleasant memories of my association with the bank. The challenges and anxieties we had navigated and the joy and fun we had had together would be enduring memories. I pointed out that in a full-length feature article on the Reserve Bank in 2012, The Economist had said: ‘The RBI is a role model for the kind of full-service central bank that is back in fashion worldwide.’ I hoped, I added, that in a few years from then, everyone watching and evaluating central banks around the world would say: ‘The RBI is a role model for the kind of knowledge and ethical institution that a central bank should be.’

There was a lunch that afternoon to bid me farewell and welcome the new governor, Raghuram Rajan. Gathered there were the directors on the board of the Reserve Bank, serving senior management and retired senior officers of the Reserve Bank, CEOs of banks and financial institutions, other financial sector regulators—about 200 people in all. There was the expected round of speeches—nostalgic, emotional and touching.

I kept my own remarks deliberately light-hearted. I told the gathering that there were many things I would miss about being governor, but most of all I would miss being important. Once I stepped down, I would enjoy the freedom to open my mouth without the pressure of having to say something profound every time I spoke and that I would freak out on going to a matinee show of Chennai Express. I gave some advice to Raghu. He could, I told him, comfortably delegate to his senior management less important tasks like setting the interest rate and issuing bank licences, but that he ought to retain with himself important decisions like the menu for lunches to be hosted by the governor, gifts to be given to visiting dignitaries and seating arrangements at meetings.

At a brief ceremony at 3 p.m. that afternoon, I signed off and Governor Rajan signed on. Minutes later, I walked out of the office, went down eighteen floors in the elevator—with hundreds of Reserve Bank staff present on the ground floor to see me off amidst the clicking cameras of the assembled press photographers—got into my car and drove away, past Flora Fountain, on to Marine Drive and Chowpatty and into my post-career life.