The government is likely to extend K C Chakrabarty’s tenure as deputy governor of the Reserve Bank of India (RBI) by two years.
Chakrabarty, appointed deputy governor in June 2009, was given a three-year term that ends on June 14.
A deputy governor in the central bank can be appointed for five years and the retirement age is 62 — the age limit is 60 for other RBI officials. A candidate has to be younger than 60 to be eligible. An exception to this rule was made during the re-appointment of Shyamala Gopinath in 2009.
Of the four deputy governors, traditionally one comes from the banking fraternity, while one is an economist. The other two are promoted from within. Chakrabarty is the most senior deputy governor and looks after banking supervision, customer service, rural planning, currency management and human resources, among others.
As a deputy governor, Chakrabarty spearheaded the agenda of the government and RBI of fostering inclusive growth by encouraging banks to expedite financial inclusion. He is also known as a customer-friendly regulator, and was instrumental in abolishing the prepayment penalty on floating rate home loans, which banks used to levy on customers. He constituted the high-profile Damodaran committee on customer service and is in the process of implementing its recommendations.
The outspoken deputy governor had a brush with controversy when the media reported his differences of opinion on monetary policy. This landed him in trouble as most of his portfolios were taken away in August 2010. However, after a mere four months, he got these back with some additions, such as the department of banking supervision.