Mumbai: Reserve Bank of India (RBI) deputy governor Rakesh Mohan resigned on Monday.
Mohan, who has eight months to retire, has quit to take up an assignment at the Stanford Centre for International Development at Stanford University as distinguished consulting professor. He will take up this appointment beginning 15 June for a period of six months. His resignation is effective from 10 June.
The first deputy governor born after India’s independence in 1947, Mohan came to Mint Road in September 2002 but before finishing his three-year term, he moved back to North Block as secretary, department of economic affairs, in October 2004. He came back to RBI in July 2005.
Mohan is in-charge of monetary policy, financial markets, economic research and statistics, secretary’s department and communication. Recently, he headed the committee on financial sector assessment that conducted a stress test on Indian financial system.
Mohan, a former chief economic adviser to the finance minister, was seen as a strong contender for the RBI governor’s post when Y.V. Reddy retired in September 2008, and speculation about his departure from RBI has been rife after D. Subbarao, the then finance secretary, was chosen by the government to replace Reddy.
“Over the last several months, as I traversed a steep learning curve, I have grown to depend on him for advice and counsel. All of us in the RBI will miss Rakesh’s counsel, expertise and his disarming candour,” Subbarao said on Monday.
After Mohan’s resignation, RBI will be left with two deputy governors instead of four. It has not yet appointed a successor to V. Leeladhar who retired in December 2009.
Arvind Virmani, chief economic adviser to the finance ministry, is the strongest contender for the post, said an RBI executive who did want to be identified.
Raghuram Rajan, honorary economic adviser to Prime Minister Manmohan Singh, could also be a contender for Mohan’s post.
Yet another aspirant for the post is Narendra Jadhav, vice-chancellor of the University of Pune, and former principal adviser and chief economist of India’s central bank.
Meanwhile, K.C. Chakrabarty, chairman of India’s second largest public sector bank, the New Delhi-based Punjab National Bank, is likely to succeed Leeladhar. T.S. Narayanasami, chairman of Bank of India, is also in the race.