Process for appointment of new RBI deputy governor begings

MUMBAI: With intense speculation surrounding Raghuram Rajan's second term, the government has begun the process of looking for a successor to HR Khan, deputy governor of Reserve Bank of India, who retires on July 7 after becoming 62.

A high-powered panel under the chairmanship of governor Rajan will interview about 8-11 executive directors of the central bank on June 6 to select Khan’s successor, two people with the direct knowledge of the matter told ET. All the executive directors are eligible for selection.

The panel will recommend three names to the finance ministry, which will then take a final call. An email sent to RBI seeking comments on the matter remained unanswered till press-time.

NS Vishwanathan, Chandan Sinha, MD Patra are some of the names that crop up for selection for the deputy governor’s job. Efficiency will play a big part in the selection process, and it won’t be just based on seniority.

For the last two appointments of deputy governors -- HR Khan and R Gandhi – merit, rather than seniority, has played a crucial part. In fact, Khan was the junior most executive director who was chosen by the committee headed by the then RBI governor Subbarao. Similarly, Gandhi was number two in the seniority ladder.

RBI has four deputy governors, of which two are appointed from among the internal candidates of the banking regulator. The other two posts are occupied by a senior public sector banker and an eminent economist.

There are a total of 11 executive directors, according to the RBI website.

Khan now looks after 10 portfolios/departments, including financial markets regulations, forex, internal debt management, external investments, payment and settlement systems.

The interview process also puts an end to speculation that Khan might get an extension.