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Gokarn's fate hangs in the balance

Source : BUSINESS_STANDARD
Last Updated: Mon, Nov 12, 2012 19:42 hrs

Reserve Bank of India (RBI) Deputy Governor Subir Gokarn’s fate hangs in the balance. Soon, a search committee would meet to shortlist the candidates to be interviewed for the post. Gokarn, 53, would complete his three-year term on November 23.

Sources privy to the developments said Gokarn, too, would appear for the interview.

A meeting between senior finance ministry officials and RBI Governor D Subbarao to finalise the names of the candidates, scheduled to be held last week, was postponed to this week.

RBI insiders do not rule out the possibility of Gokarn being reappointed to the post. This is primarily because Subbarao, the head of the search committee, had recommended Gokarn’s extension a few months earlier, when Pranab Mukherjee was the finance minister. The current dispensation in the ministry, however, wanted to take a fresh look at this.

Along with portfolios such as economic research & policy, statistics and information management, Gokarn also handles the all-important monetary policy department.

In its second quarter monetary policy review in October, RBI had kept the policy rate unchanged, despite the finance ministry favouring lower rates. Differences between North Block and Mint Road also surfaced after the banking regulator clarified it wouldn’t issue new banking licences till the Banking Regulation Act was amended, despite the ministry saying fresh players could be allowed even within the current regulatory framework.

The central bank has four deputy governors, two of whom are selected from within the central bank’s ranks.

For the remaining two posts, a commercial banker and someone from the academic world are selected. Deputy governors Anand Sinha and H R Khan were promoted from within the RBI ranks, while K C Chakrabarty is a commercial banker.

According to norms, a deputy governor can be appointed for five years or till the age of 62, whichever is earlier.

In mid-2009, Gokarn had replaced Rakesh Mohan as RBI deputy governor. Earlier, Gokarn was chief economist of Standard & Poor’s, Asia-Pacific.



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