Govt appoints three more directors on RBI central board

As many also appointed on local boards

Amid a controversy that a truncated Reserve Bank of India central board had approved demonetisation of high-value notes, the government on Thursday appointed three noted names to the body. 

Ashok Gulati, former chairman of the Commission for Agricultural Costs and Prices, is one. Manish Sabharwal, chairman and co-founder of recruitment consultancy TeamLease, and economist Rajiv Kumar were also named part-time non-official directors on the board, for a four-year term. 

The Appointments Committee of the Cabinet had approved the appointments. It also approved the proposal of the department of financial services for appointment of three members on the local board of RBI.

Prasanna Kumar Mohanty (Southern Local Board), Vallabh Roopchand Bhanshali (Western Local Board) and Sunil Mitra (Eastern Local Board) have been appointed for four years.

RBI's affairs are governed by the Central Board of Directors. The board is appointed by the government. There are five Official Directors -- the Governor and not more than four Deputy Governors. Besides, the government nominates 16 Non-Official Directors. Ten are nominated from different fields, two are government officials and one director each from the four local boards. 

There were 10 members on the Board at the time of approving demonetisation, seven of which attended the board meeting to decide on November 8. Of these seven, three were directors. 

In a seven-page note to the Parliament committee on finance, the central bank had earlier stated that it was the government which “advised" it to scrap Rs 500 and Rs 1,000 notes on November 7 last year. The board of the central bank met the very next day and recommended accordingly, according to the note. 

Former finance minister P Chidambaram had asked: “How did these three wise men and the RBI governor reach the conclusion in 30 minutes?”

Before these latest appointments, RBI had 11 members on the board, the latest being deputy governor Viral Acharya. 

Others are RBI governor Urjit Patel, three deputy governors, economic affairs secretary Shaktikanta Das, financial services secretary Anjuly Chib Duggal, Tata Sons chairman designate N Chandrashekharan; Nachiket Mor, country director for the Bill and Melinda Gates Foundation; former Gujarat chief secretary Sudhir Mankad and B N Doshi, former finance head at Mahindra & Mahindra.