PMO to consider RBI deputy governor's appointment afresh

One of the deputy governor's posts is vacant following exit of KC Chakrabarty

The Prime Minister’s Office (PMO) will consider afresh the issue of appointing a deputy governor at the Reserve Bank of India (RBI). One of the deputy governor’s posts fell vacant following the exit of K C Chakrabarty on April 25, two months ahead of schedule.

Sources said while the finance ministry under the United Progressive Alliance government had recommended its choice to the Cabinet’s appointment committee (which comprises several ministries and departments, including PMO), the PMO had left the decision to the new government.

Sources indicate the files will be referred to the PMO once again. However, it isn’t clear whether the ministry will go ahead with the choice of the previous dispensation.

Traditionally, RBI has four deputy governors, of whom two are selected from the ranks of RBI. While the third is an economist, the fourth is a commercial banker. The current vacancy will be filled by a commercial banker.

Till the time a new deputy governor is appointed, Chakrabarty’s portfolios, including banking supervision, customer service, currency management, financial stability, and rural planning and credit development, have been re-distributed among the other three deputy governors.

For the deputy governor’s post, a search panel headed by the RBI governor had interviewed nine chairmen and managing directors of public sector banks. Punjab National Bank’s K R Kamath and Bank of Baroda’s S S Mundra were seen as strong contenders.

An RBI deputy governor can be appointed for five years or till he/she is aged 62, whichever is earlier. To be eligible for the post, a candidate should be less than 60. However, there have been instances when both criteria have been relaxed.

Though the term of H R Khan, another deputy governor, is set to expire in July, he is eligible for an extension.