Cabinet Secretary to head search panel for RBI deputy governor

RBI’s 11executive directors to appear for interview on June 6

Pradeep Kumar Sinha.

The government has formed a search-cum-selection panel headed by Cabinet Secretary, Pradeep Kumar Sinha, to choose a deputy governor of the Reserve Bank of India – a departure from the past when such a panel was headed by the central bank governor.

RBI Governor Raghuram Rajan will be a member in the panel. The search panel will include a representative from the Prime Minister’s Office, one from the Finance Ministry, an economist and a professor from Gujarat National Law University, sources with direct knowledge of the development said.

Controversy

The move comes at a time when there is a controversy regarding an extension for Mr. Rajan, who completes his three year term in September.

Subramanian Swamy – a ruling Bharatiya Janata Party member who was recently nominated to the Rajya Sabha – wrote to Prime Minister Narendra Modi urging him not to extend the RBI governor’s term.

Mr. Modi has maintained silence so far on the issue except saying in an interview to the Wall Street Journal that the matter is an administrative one and should not be a subject of media speculation.

In 2015, when the term of Urjit Patel, one of the deputy governors, was nearing an end, a search committee headed by the RBI governor was formed. However, when Chairman of Securities and Exchange Board of India (Sebi), U.K. Sinha’s term was ending, the search panel was headed by the Cabinet Secretary. Both Mr Patel’s and Mr Sinha’s terms were extended.

The term of Harun Rashid Khan - one of the four deputy governors of the RBI — will end in first week of July, which necessitated the formation of the search panel to find a successor.

All the eleven executive directors have been called for interviews, which are scheduled for June 6.

Five-year term

Deepak Mohanty is the senior most among the executive directors, followed by Deepali Pant Joshi. A deputy governor can be appointed for a maximum of five years.

Out of the four deputy governors, two are appointed from outside – of which, one is an economist and the other a commercial banker.

The remaining two deputy governors are appointed from within the ranks of the RBI. Mr Khan, who was promoted from within the ranks was appointed as deputy governor in July 2011, and then reappointed in 2014 for two years.