The central government is likely to extend the term of RBI governor Shaktikanta Das, news agency Reuters reported, quoting sources aware of the development. If granted an extension, Das would become the longest-serving head of India’s central bank since the 1960s.
Sources told Reuters that no other candidates are under consideration, nor any selection committee had been set up to choose Das’s successor. Hence, the term of the current RBI governor is likely to be extended, the report said.
Another source with direct knowledge of the development said the announcement on Das’s extension will be made public after the assembly elections in Maharashtra are complete on November 20. The moral code of conduct by the Election Commission of India (ECI) bars the ruling party from making any ad-hoc appointments that could affect the electorate’s voting behaviour.
Reuters said the Finance Ministry, the Prime Minister’s Office, and the central bank did not immediately respond to emails seeking comment. A final decision would be taken by the Prime Minister, sources added.
Who is Shaktikanta Das?
Das was a former Secretary of the finance ministry who assumed charge as the 25th Governor of the Reserve Bank of India on December 12, 2018. He has also served as a member of the 15th Finance Commission and was the G20 Sherpa of India.
During his long tenure in the finance ministry, Das was directly associated with the preparation of as many as eight union budgets. Das has also served as India’s Alternate Governor in the World Bank, Asian Development Bank (ADB), New Development Bank (NDB) and Asian Infrastructure Investment Bank (AIIB). He has represented India in international bodies like the IMF, G20, BRICS, SAARC, etc.
The report notes that Das’s appointment as the RBI governor came when the central bank’s relationship with the central government was under strain post-demonetisation on November 8, 2016.
How is the RBI Governor appointed?
The head of India’s central bank is appointed by the central government under the provisions of the Reserve Bank of India Act, 1934. The RBI governor is appointed by the Appointments Committee of the Cabinet (ACC), chaired by the Prime Minister.
The Department of Financial Services (DFS) in the Ministry of Finance shortlists candidates based on qualifications, experience, and suitability. Recommendations are also sought from various sources, including experts, bureaucrats, and economists.
While there are no specific, detailed eligibility criteria mentioned in the RBI Act, the government considers persons with expertise in economics, banking, finance, or public administration.