The 50-year-old Rajan, who is the second youngest Governor after CD Deshmukh, who moves to Mumbai after a year-long stint as the chief economic advisor in the Ministry of Finance.
"I handed over charge to Raghuram Rajan... the country could not have asked for a more capable person to lead the RBI in these difficult time”," Subbarao said after stepping out of the RBI office.
An alumnus of the Indian Institute of Technology (IIT), New Delhi, the Indian Institute of Management (IIM), Ahmedabad, and the Massachusetts Institute of Technology, Rajan was the youngest economic-counsellor and chief economist at the IMF from October 2003 to December 2006.
Bank of Baroda chairman and managing director SS Mundhra said Rajan is experienced, qualified and competent to lead the economic thinking in the country during these trying times.
"Dr Rajan has too much of intellectual reputation and we wish him all the best," chairman of country's largest lender State Bank of India Pratip Chaudhuri told reporters.
It can be noted that Rajan assumes charge amidst extremely difficult pressures on the external front which are resulting in the rupee getting battered to become one of the worst hit currencies globally.