At a time when the economy is facing headwinds from several fronts, the government is yet to appoint the Deputy Governor in-charge of Monetary Policy at the Reserve Bank of India (RBI).
The post had fallen vacant after the resignation of Viral Acharya almost three months ago.
Mr. Acharya’s last working day at the central bank was July 23.
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Applications invited
On August 1, the government had invited applications to fill up the Deputy Governor’s post. According to the advertisement, the applicant should have at least 25 years of 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 was for three years and the person was eligible for reappointment.
The Financial Sector Regulatory Appointment Search Committee (FSRASC) is responsible for selecting the candidate. The central bank has four Deputy Governors of which two are appointed from outside — one, a commercial banker and the other, an economist. The remaining two are promoted from within the RBI.
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The importance of the economist-Deputy Governor can be gauged from the fact that the person is on the monetary policy committee that decides on interest rate and also handles the all-important monetary policy department.
After Mr. Acharya resigned, B.P. Kanungo, a Deputy Governor of the RBI, was given the charge of the monetary policy department and was inducted into the six-member monetary policy committee.
There have been two monetary policy reviews after Mr. Acharya had quit — one in August and another in October. The next review is scheduled for early December.
Before Mr. Achraya, Urjit Patel was the economist-Deputy Governor at the RBI. He later became the Governor after Raghuram Rajan’s term ended.
However, it is not unusual that the Deputy Governor’s post is left vacant for a long time. When Mr. Patel became the Governor in early September of 2016, the Deputy Governor’s post was vacant for four months.