Govt said to have asked all executive directors of the central bank to appear for an interview before the appointments committee led by the cabinet secretary
Mumbai: The government has kicked off the selection process to find a replacement for Reserve Bank of India (RBI) deputy governor R. Gandhi whose term is ending in April. It has asked all executive directors of the central bank to appear for an interview before the appointments committee led by the Cabinet Secretary, said three people familiar with the development, including an executive director.
To be sure, an extension for Gandhi cannot be ruled out as he is the key RBI official overseeing the demonetisation exercise, said one of the people cited earlier. Gandhi, who has been an RBI lifer, took charge as deputy governor in 2014 for three years.
He is also eligible for an extension of at least a year since he turns 62 only in 2018.
A deputy governor’s tenure can be extended on recommendations of the RBI governor. However, there are no guarantees as the case of Usha Thorat and Subir Gokarn, former deputy governors, show. The government had then denied extensions to Thorat and Gokarn.
The RBI spokesperson and the finance ministry spokesperson did not respond to emails and calls seeking comment till the time of going to print.
Gandhi too did not reply to text messages.
The decision to find a replacement for Gandhi comes at a time when he is in charge of the department of currency management, which is overseeing the replacement of all the Rs500 and Rs1,000 notes, about 86% of the country’s currency in circulation. He is also the chairman of Bharatiya Reserve Bank Note Mudran Pvt. Ltd, a subsidiary of RBI which is in charge of two main currency printing presses in Mysuru (Karnataka) and Salboni (West Bengal).
The central bank has been criticized for the lack of preparedness in managing the cash flow and also the flip flops in its regulations following 8 November.
Questions have also been raised about the erosion in autonomy of the central bank and communication policy of the RBI Governor.
According to one of the people cited earlier, Gandhi was the lone RBI official involved in the demonetization exercise starting from the decision making stage of printing new Rs500 and Rs2000 notes.
Besides Gandhi, deputy governor S.S. Mundra’s tenure also comes to an end in July this year. This post is traditionally reserved for a career commercial banker.
RBI typically has four deputy governors—two RBI insiders, one economist and the other a banker.
The central bank usually chooses the banker candidate from the public sector. Apart from Gandhi and Mundra, the other deputy governors are N.S. Vishwanathan and Viral Acharya, who was appointed in December.
(Remya Nair contributed to the story).
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