The government has nominated department of financial services Secretary D K Mittal on the board of directors of the Reserve Bank of India (RBI), taking the number of government nominees on the board to two.
Department of economic affairs Secretary R Gopalan is already on the board. The move to have a second nominee is expected to improve coordination between government and regulator.
The nomination of Mittal, a 1977-batch Indian Administrative Services officer from the Uttar Pradesh cadre, comes with immediate effect. In August last year, he had taken charge as secretary to the department of financial services after a six-month stint in the ministry of corporate affairs.
A finance ministry official said on Wednesday the appointment of Mittal was by name. This meant he would continue to be a director on the board of RBI even if he moved to some other department, the official said.
Speculation had been rife about Mittal being a contender to head the commerce department, after the appointment of commerce secretary Rahul Khullar as ambassador to Belgium. The commerce department was where Mittal spent the crucial years of his career — and played a vital role in propelling special economic zones and pushing India’s agenda in the Doha talks.
Earlier, there was provision for only one government nominee on the board of directors of RBI under clause (d) of sub-section (1) of Section 8 of the RBI Act. Then, in December last year, the winter session of Parliament saw the Act getting amended to make provision for two government officials.
The government has amended its laws to have a bigger say in the decision making of the RBI, by having two members on the central bank’s board as compared to one now. Mittal will be the 18th director on RBI board.
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The move had not gone well with the RBI, with some of its executives complaining that the amendment, done at the last minute, was not on the agenda earlier.
The central board of RBI is appointed by the government for a period of four years to govern the affairs of the central bank. It comprises RBI governor and a maximum of four deputy governors as official directors and 10 directors from various fields and two government officials nominated by the government besides four directors from local boards as non-official directors.