ISB dean Rao 'withdraws' from RBI panel

Indian School of Business dean M Ramamohan Rao, whose role as an independent director on Satyam’s board had recently raised criticism, has resigned from the panel to select a Reserve Bank of India deputy governor.

The development is expected to delay the process of appointing a replacement for V Leeladhar, whose term ended early December.

Sources close to the selection process said last month, Rao wrote to the finance ministry opting out of the panel. Rao could not be reached for comment as he was travelling, but ISB spokesperson Bhuvana Ramalingam confirmed that he had withdrawn from the panel.

The move came days after he chaired a controversial board meeting mid-December that cleared Satyam’s acquisition of two companies — Maytas Infra and Maytas Properties — linked to the family of the IT firm’s founder and chairman B Ramalinga Raju. On December 29, Rao also resigned from the Satyam board.

Member of Parliament Abani Roy had questioned Rao’s continued presence on the crucial selection panel. The ISB dean is also a member of the Telecom Regulatory Authority of India (Trai) and his term is coming to an end soon.

Rao’s resignation has created a vacancy on the panel headed by RBI Governor D Subbarao and the finance ministry will soon initiate the process to appoint a new member. “You will need a management expert who is renowned. It will take a few days for the government to finalise a replacement for Rao,” said a source.

The process for finalising a list of candidates is expected to take a while since the governor will be unavailable from January 10 to 15.

A meeting will be convened only after January 15 and a panel of three candidates will be recommended to the appointments committee headed by Prime Minister Manmohan Singh.