A Revolving Door for Leadership

With the financial sector maturing, the door to regulatory agencies needs to be opened to a more diverse talent pool

- K P KRISHNAN

A recurring observation has once again surfaced: The chairpersons of key financial regulators—the Reserve Bank of India (RBI), the Securities and Exchange Board of India (Sebi), and the Insurance Regulatory and Development Authority of India (Irdai)—are all former Indian Administrative Service (IAS) officers. The narrative that often accompanies this fact is one of continuity and a deep-seated understanding of public systems, suggesting that these seasoned public servants are uniquely equipped for the task. The argument is that this is not a coincidence but a reflection of a pragmatic recognition of their skill sets, which extend beyond narrow domain expertise to include strategic thinking, crisis management, and an innate knowledge of how the government machinery works.

One might look back at the history of these institutions and find evidence to support this view. A long list of former RBI governors—S Venkitaramanan, C Rangarajan, Bimal Jalan, Y V Reddy, and D Subbarao—all came from a civil service or extensive public service background. Similarly, at Sebi, chairmen since 1992 such as G V Ramakrishna, D R Mehta, G N Bajpai, M Damodaran, C B Bhave, and U K Sinha had similar professional origins. The same pattern holds for Irdai, where early leaders like N Rangachary, C S Rao, J Hari Narayan, and T S Vijayan were predominantly civil or public servants.

It is easy to look at this chronology and conclude that India has successfully developed a cadre of public servants perfectly suited to lead our regulatory bodies. This perspective is, however, dangerously misleading. It confuses the observed reality with a desired outcome. What we are seeing is not the success of a system, but the symptom of its immaturity. The consistent preference for civil servants is not a choice made from an abundance of qualified candidates from all sectors; it is an outcome of institutional weakness that makes it difficult for anyone else to succeed.