Speculation on 2nd term for RBI governor Raghuram Rajan refuses to die down

MUMBAI: Reserve Bank of India (RBI) governor Raghuram Rajan kept the market guessing about his future at the central bank, putting the ball firmly back in the government’s court. Governor Rajan came prepared for the question and read out a self-prepared statement to ensure that he didn’t fumble for words.

"It will be cruel of me to spoil all the fun the press is having with all the speculation," Rajan said, with a dash of humour.

"If you know such cases, the decision is reached after discussion with the government and the incumbent. I am sure you will know when there is news. I will direct you all to the statements of the prime minister and the finance minister. That is all I have to say," he said.

Rajan's three-year term as RBI governor ends in September this year. Speculation on whether the government will give him another term has reached a crescendo in the past two weeks, especially after Rajya Sabha MP Subramanian Swamy launched a tirade against him, accusing him of 'willfully' wrecking the Indian economy with high interest rates.
Later, in a letter to Prime Minister Narendra Modi, Swamy levelled six allegations, accusing Rajan of leaking confidential financial information through his personal email and continuing to hold a US Green Card despite holding a "very high Government of India post". Swamy also asked for "immediate termination" of Rajan's services as the RBI governor in "national interest".

Prime Minister Modi and finance minister Arun Jaitley have so far not reacted to Swamy's charges. In an interview to the Wall Street Journal on May 26, Modi said, "I don't think this administrat ive subject should be an issue of interest to the media. Besides, it will come up only in September."

Jaitley has refused to discuss the issue through the media but insisted that relations between the finance ministry and RBI have been cordial.

"As far as the finance ministry and RBI are concerned, there is an institutional relationship between the two. It is a very mature relationship," Jaitley had said.