New Delhi: The Narendra Modi government has invited applications for the post of deputy governor in the Reserve Bank of India (RBI) to replace Viral Acharya and the indications from the ad are that an IAS officer would be preferred.
Last month, Acharya announced his resignation from the post, which is traditionally occupied by economists from within or outside the government. In the last three terms at least, ‘outside’ economists like Urjit Patel and Subir Gokarn had held the position.
After Acharya’s unceremonious exit, the Modi government is likely to be extra cautious in its choice this time. In all likelihood, the new appointee will be part of the monetary policy committee (MPC), with a vote on policy rate movement.
The RBI has four deputy governors on its board — typically, an economist, a banker and two from within the central bank. The economist is usually one of the RBI representatives in the MPC.
During his two-and-a-half-year stint, Acharya shared an acrimonious relationship with the Modi government, despite the fact that he was brought in by the same regime. He delivered many hard-hitting speeches, stressing the need for autonomy of the central bank as well as opposing any dilution in the RBI’s prompt corrective action framework that placed lending curbs on weak banks.
Quitting six months before his tenure ended, Acharya served his last day in office on 23 July.
Before him, Patel, another Modi government appointee, was also involved in a major stand-off with the dispensation last year while he was RBI governor. He resigned in December citing personal reasons, over nine months before his term was to end.
RBI executive director Michael Patra, finance ministry’s principal economic adviser Sanjeev Sanyal, JPMorgan Chase’s chief India economist Sajjid Chinoy, and Aditya Birla Group chief economist Ajit Ranade are said to be among the contenders for the deputy governor post.
Call for applications
The Department of Financial Services released an advertisement for the deputy governor’s post on 31 July, calling for people with 25 years of experience either in public administration at the level of secretary or with a similar work experience in an Indian or international public financial institution.
The post is also open to people with an exceptional track record in the relevant field — this category doesn’t carry the 25-year experience requirement.
The successful candidate will get a three-year term with the possibility of a reappointment.
The last date for applications is 30 August.
This is the same style and criteria that the government has used in the past to advertise for the post. A similar format was put out when Patel was elevated to RBI governor in 2016, necessitating an appointment at the deputy governor level. This is how Acharya, a professor of economics at the Stern School of Business of the New York University, was recruited.
However, in 2017, the government had changed this format while inviting applications to appoint a deputy governor to succeed to S.S. Mundra, a former banker. Since the post is typically held by a banker, the government had sought people with experience of up to 15 years in banking and financial markets.
Besides those who apply for the post, the cabinet secretary-led Financial Sector Regulatory Appointments Search Committee can also recommend a person to be appointed to the post.
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No self respecting economist / banker would agree to join RBI unless the Modi government restores the monetary independence of the Bank. Every government tries to control the central bank to their own detriment.
Subhash Garg is familiar with the terrain. He would be a good choice.