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Monday, July 23, 2018

How Governor Raghuram Rajan had his way on venue for RBI interviews

Two sources close to the development told The Indian Express that it was at Rajan’s insistence that the interviews were conducted in Mumbai, the traditional venue.

Written by Aanchal Magazine , Sandeep Singh | New Delhi | Updated: July 27, 2016 11:32:41 am
raghuram rajan, rate cut, interest rate rbi, rbi raghuram rajan, monetary policy committee, rbi news, no second term for rajan RBI Governor Raghuram Rajan. (Source: PTI)

After the Centre last month got its most senior bureaucrat to replace the RBI Governor as the head of a panel to select a deputy governor for the central bank, Governor Raghuram Rajan prevailed over the Centre on another front — the venue of the interviews.

While earlier, the appointment of deputy governor used to be carried out by a panel headed by the RBI governor, this was the first time that the Financial Sector Regulatory Appointments Search Committee, chaired by cabinet secretary P K Sinha, made the selection. The panel included Rajan as well.

N S Vishwanathan was eventually picked as deputy governor of RBI in June in place of H R Khan, who retired earlier this month.

Sources said that with the appointment of the cabinet secretary as the head of the selection panel, the plan was to hold the interviews in New Delhi. The interviews, though, were finally conducted at the RBI headquarters in Mumbai. Two sources close to the development told The Indian Express that it was at Rajan’s insistence that the interviews were conducted in Mumbai, the traditional venue.

An official said Rajan had written to the Cabinet Secretary expressing reservations about candidates travelling to Delhi to appear for the interview. “Rajan was of the firm view that since it is an RBI appointment, the interview should be held at the RBI headquarters in Mumbai and not in Delhi,” said the source.

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It is learnt that the government tried to explain that the proposed exercise would be on the lines of previous meetings, and RBI’s views would be taken into account, but the RBI governor stood his ground. “It was explained to RBI that the government doesn’t want to run the RBI down and that the RBI’s views will be taken as always, but when the RBI did not concede, the cabinet secretary agreed to travel to Mumbai for the interviews,” said another official.

A text message sent to Sinha on Monday did not elicit a response. The RBI could not be contacted for a comment.

The development at the RBI over appointments is in line with the search panels formed for top positions in other regulatory bodies, such as the Sebi and insurance regulator IRDAI, which are headed by top Central government bureaucrats and not the chief of these regulatory bodies. The interview panel for the selection of two Members (life and non-life) for IRDAI last year was headed by the then financial services secretary Hasmukh Adhia. The panel included IRDAI chairman T S Vijayan and former head of LIC and Sebi G N Bajpai. Similarly, the term of current full-time Sebi Member Prashant Saran will end in June and a panel headed by a Cabinet secretary will select the new member.

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