A Suitable Deputy Governor For The RBI

A trained economist would be the ideal candidate for the job. But the thinking in official circles seems otherwise

- Himadri Bhattacharya

The deputy governor in charge of monetary policy, among other responsibilities, left the RBI towards the end of July before completing his term.

The search for his replacement began right thereafter. Now there are reports that the government is unlikely to select anyone with a similar background for the vacant position.

Somehow, an impression seems to have gained ground in official circles that putting independentminded trained economists with some global acclaim in senior positions in the government or in the RBI is not the right thing to do.

The early exit of as many as four such persons from the government and the RBI over the last couple of years, citing personal reasons, cannot be a sheer coincidence. There is certainly more to it than meets the eye.

Pivotal role

Like in any other major central bank, although the governor is the most important public face of the RBI, the deputy governors are really the persons that invigorate, sustain and occasionally refurbish that face. They together run the institution. As things stand now, the government can appoint no more than four deputy governors.

At the time of RBI’s inception on April 1, 1935, the British authorities appointed two knighted gentlemen as deputy governors of the RBI, one of whom was an Indian — Sikandar Hayat Khan.

His selection was essentially a political one, as it was widely known then that his views and actions were sharply at variance with the mainstream nationalist movement of those days, although he had some credentials of being a successful entrepreneur with varied business interests, including in a regional bank. He left the RBI after six months to pursue his political ambitions.