RBI board to take up COO issue today

Appointment of DG in RBI has to be taken by ACC but RBI can decide on a COO

The board of the Reserve Bank of India (RBI), meeting in Chennai on Thursday, is likely to take up the issue of appointing a chief operating officer (COO) with the rank of deputy governor (DG).

At present, the central bank has provision for four DGs. For raising this, the RBI Act will have to be amended. Till this happens, it is proposed to appoint a COO with the rank.

Any appointment of a DG in RBI must be taken by the Appointments Committee of the Cabinet (ACC), headed by the Prime Minister. However, RBI can decide on a COO.

To be eligible for a DG's job, a person must be below 60 years of age. Appointment is usually for five years or till the age of 62, whichever is earlier. It isn't clear if these will apply for the proposed COO. Also, RBI’s service rules are presently applicable only till an executive director's (ED's) rank.

Of the four DGs at present, two are promoted from within RBI's ranks and the other two are appointed from outside – one is an economist and the other a commercial banker. There is  ambiguity if the COO will be an internal or external candidate.

It is learnt the proposal to have a COO with a DG's rank was first taken up during a meeting of a committee of the central board, which generally meets every Wednesday. The latter suggested this be taken up at a board meeting of the central bank, where Union government nominees are also present. The economic affairs secretary and financial services secretary are nominated as board members.  It is, however, not clear if RBI will seek the board's approval or only inform it.

The increase in the number of DGs, and also EDs, are part of a personnel restructuring the central bank is currently undertaking. RBI plans to increase the number of EDs from nine at present to 11.

RBI recently set up three committees. One is on organisational restructuring and is headed by two EDs, B Mahapatra and Deepak Mohanty. Another is to review training and skill development, headed by P Vijaya Bhaskar. One is on human resources (HR), headed by R Gandhi, recently promoted as a DG.

One recommendation of the HR committee is a complete recast of RBI's internal departments and allowing its officers to spend longer years within departments doing similar work. It is also proposed that skill gaps in departments be identified, keeping in view the latter's evolving role for the next 10 years.