The Centre will name the next RBI governor before Raghuram Rajan demits office on September 4 and the selection will be made from among a few probables the Modi government is believed to have zeroed in on.
According to reports, the government is not deploying a head-hunting panel to scout for Rajan’s successor and the person taking the job will likely join the central bank as an officer on special duty (OSD) before his term ends.
“It (announcement of a new governor) will happen reasonably in advance. We don’t want unnecessary speculation,” PTI quoted a top government source as saying. “The process of selection is already on.”
The practice of moving in a successor as an overlap before the expiry of the incumbent’s tenure was adopted by the UPA government.
On August 7, 2013, Rajan had come on board as then governor D Subbarao’s OSD to manage the transition.
The names of SBI chairman Arundhati Bhattacharya, former RBI deputy governor Subir Gokarn, RBI deputy governor Urjit Patel, former RBI deputy governor Rakesh Mohan and chief economic advisor Arvind Subramanian are among those speculated to be considered to succeed Rajan as the central bank chief.
In a surprise letter to his RBI colleagues on Saturday, Rajan said he will be returning to academia when his term as governor ends.
Media reports said quoting Rajan’s friends and a finance ministry source that a selection panel was to consider a field of candidates rather than directly offer the former IMF chief economist an extension to his three-year term, effectively forcing him to reapply for his own job.
“He felt it would belittle the position of the RBI governor if he had to appear before the committee,” Reuters quoted a senior commercial banker as saying.
“It would reveal a lack of government support. Rather than have two more years of constant quibbling, he decided to go,” said the banker, who knows Rajan personally but had not spoken to him since his decision.