RBI set to get a new dy governor

Gokarn unlikely to get further extension

The Reserve Bank of India (RBI) is set to get a new deputy governor, with the government deciding against giving any further extension to Subir Gokarn. The finance ministry had earlier extended Gokarn’s tenure till December 31, after his three-year term expired in November. Gokarn, in charge of the monetary policy department, was appointed in November 2009. “An order naming a new deputy governor was expected anytime now, maybe on Monday itself,” a source said.

Among the names doing the rounds in the finance ministry are Kalpana Kochhar, chief economist for South Asia with the World Bank, and economist Urjit R Patel. However, no confirmation was available on the names.

The government had appointed a selection committee, headed by RBI governor D Subbarao, to find Gokarn’s successor. Though Gokarn, 53, was eligible for appearing in the interview, the sources indicated he was not interested.

A deputy governor of RBI can be appointed for a period of five years or till the age of 62, whichever is earlier. The decision not to extend Gokarn’s tenure comes despite a strong recommendation by Subbarao for extending his term for another two years. But the ministry was adamant on a new face.

Gokarn had replaced Rakesh Mohan as deputy governor. Prior to joining the central bank, he was chief economist of Standard and Poor’s, Asia-Pacific. The central bank has four deputy governors, two of whom are selected from within the central bank’s ranks. For the remaining two posts, a commercial banker and someone from the academic world are selected. Deputy governors Anand Sinha and H R Khan were promoted from within RBI ranks, while K C Chakrabarty was a commercial banker.

Deputy governor Sinha’s term will get over in February next year, when he becomes 62.

RBI, however, has requested the ministry to make an exception in this case by extending Sinha’s term by one more year.

Sinha looks after the department of banking operations and development, which is framing the final guidelines on new bank licences.