Mint Road Vs North Block : Managing the regulator
Mint Road Vs North Block: A move to appoint a government official as a deputy governor in the RBI seems to be aimed at improving coordination between the regulator and the finance ministry...
Managing the regulator
This refers to “Mint Road Vs North Block” (Business Standard, Raisina Hill, May 28). A K Bhattacharya has hinted at filling up of the existing fourth vacancy of RBI Deputy Governor by a serving civil servant who is conversant with the working of the finance ministry and/or PMO and RBI to bridge the alleged gap between policy perceptions of GOI and RBI. Perhaps, many at Raisina Hill would have even identified the person the writer has in mind, though one is not sure whether he/she is a candidate competing in the selection process underway now to appoint the fourth RBI deputy governor.
Since September 2016, media has been more open in speculating about the frictions between Mint Road and North Block. It is no secret that since the days Y V Reddy was RBI governor, till the last monetary policy statement, the pre-monetary policy stances of finance minister or finance ministry spokespersons notwithstanding, GOI has been accepting the professional stance of India’s central bank on monetary policy issues.
The same cannot be said about financial sector regulatory issues or even HR-related issues within RBI in which GOI conveniently tries to use ‘ownership rights’ directly or indirectly which, sometimes embarrassed RBI’s top management.
As mentioned in the article, traditionally, as an abundant caution to balance various interests, GOI has been taking care to have at least one career bureaucrat with excellent financial sector track record and another career banker who had experience as CEO of a big commercial bank among the governor and his deputies in RBI. The suggestion that a civil servant-turned deputy governor is necessary for RBI to have meaningful policy interaction with GOI will take the debate to a different level, which is premature at this stage.
M G Warrier, Thiruvananthapuram