RBI search panel may back economist for Deputy Governor

‘Tussle between economists, IAS lobby’

RBI logo is seen outside its headquarters in Mumbai.

The appointment of the deputy governor in the Reserve Bank of India to fill up the vacancy that was created after Viral Acharya’s departure could be a complicated one.

This is because there is a strong view in a section of the bureaucracy that the post, traditionally held by an economist, should be filled by a civil servant this time.

On the flip side, despite the strong push by the IAS lobby to do away with an economist deputy governor, some members of the search panel feel tradition should be maintained since it is a specialist’s job.

The interviews for the post, vacant for more than three months, is scheduled for November 7.

The RBI has four deputy governors — two are appointed from outside while the remaining two are promoted from within. Of the two that from outside, one is a commercial banker and the other, an economist.

Mr. Acharya, C.V. Starr Professor of Economics in the Department of Finance at New York University Stern School of Business, resigned from the deputy governor’s post six months before his tenure ended. Mr. Acharya’s last working day at the RBI was July 23.

Before Mr. Achraya, Urjit Patel was the economist-Deputy Governor at the RBI. He later became the Governor after Raghuram Rajan’s term ended. According to sources, despite hectic lobbying by bureaucrats, an economist may be finally chosen as Mr. Acharya’s successor since the the deputy governor is also in the monetary policy committee that decides interest rates. The economist deputy governor is also in charge of the all important monetary policy department.

Sources said that earlier too, when the vacancy for commercial banker-deputy governor came up, there was a strong push to appoint a bureaucrat. The Financial Sector Regulatory Appointment Search Committee is responsible for selecting the candidate.

On August 1, the government had invited applications to fill up the Deputy Governor’s post, but did not specify that only economists must apply. According to the advertisement, the applicant should have at least 25 years’ work experience in public administration, including at the level of secretary or equivalent in the central government.

Candidates with at least 25 years of work experience in an Indian or international public financial institution could also apply. The appointment is for three years and the person was eligible for reappointment.