Chakrabarty resigns abruptly from RBI

States ‘personal reasons’ for the sudden move.

By: ENS Economic Bureau | Mumbai | Published: March 21, 2014 1:42 am

Reserve Bank of India deputy governor Dr Kamalesh Chandra Chakrabarty has put in his papers, less than two months ahead of his retirement. 

Chakrabarty, whose five-year tenure was to end on June 15, 2014, will serve a one-month notice period, said a senior RBI official. “He mentioned that he’s resigning on personal reasons. He hasn’t given any specific reasons for the resignation,” said a senior RBI official. Chakrabarty’s sudden move, that too just ahead of the next RBI monetary policy, has taken the banking fraternity by surprise.

He is the first RBI top official to quit before retirement in the last two decades. With Chakrabarty moving out, two posts of deputy governor will fall vacant as the government has not yet brought in any replacement for Anand Sinha, who retired two months ago.

Chakrabarty was appointed as RBI deputy governor for a three-year term on June 15, 2009, and was subsequently given a two-year extension. Known for his candid and outspoken views, Chakrabarty had earlier run into trouble during the tenure of D Subbarao as RBI governor and was stripped of some of his responsibilities for stating that the RBI was not doing enough to control inflation. He, subsequently, got back the portfolios that had been divested.

“He had indicated to his friends that he wanted to take up an assignment abroad as his family is based in the UK. He has got a good offer from London and he wants to take up this offer immediately,” said an RBI source.

A search panel had recently called five PSU bankers, including Punjab National Bank chairman KR Kamath, Bank of India chief VR Iyer and Indian Overseas Bank chairman M Narendra, for interviews to identify Chakrabarty’s successor. His assignments at the RBI included guiding and overseeing the areas pertaining to supervision of banks, currency management, payments and systems, financial stability, customer service, rural credit and human resource management.

Chakrabarty had a long career in banking before moving to the RBI. After working in Bank of Baroda for 26 years, he was posted as chief executive of BoB’s UK operations between 2001 and 2004 before being elevated as executive director of Punjab National Bank in 2004. Chakrabarty, who holds a doctorate in statistics, held the posts of chairman and managing director of Indian Bank and Punjab National Bank and chairman, Indian Banks’ Association before taking charge as the RBI deputy governor.

Dy Governor’s parting shots

New Delhi: RBI deputy governor KC Chakrabarty, who resigned on Thursday, had, during the day, commented on issues ranging from new bank licences to gold import.

Bank licences

Amidst reports that the Election Commission may put a spanner on the Reserve Bank plan to issue the first few new bank licences by the month-end, Chakrabarty said that the central bank is yet to hear from the poll panel in this regard. “I only know that the RBI has written to the EC seeking their views. Whether they have replied I have no idea. Till yesterday, I had no information on that,” he said on the sidelines a function in Mumbai.

On United Bank of India

Chakrabarty said that the Reserve Bank did not have any “magic wand” to bring back United Bank of India on track and the troubled lender’s employees have to work hard to tide over the ongoing crisis. “We have no magic wand to bring the bank back on track. The bank people have to work hard,” he said.

On gold import

Defending the decision to allow more banks to import gold, he said, “If there is competition, gold will be imported at a lower cost. Whatever gold will be imported that will be cheaper, to that extent CAD (current account deficit) will improve.” ENS & PTI

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