 "Move to change RBI governor ranking")
A senior government official said the finance ministry had prepared such a plan. The governor currently has the rank of a Union minister of state, a position no other regulator holds.
Accordingly, the four deputy governors, who now hold the rank of secretary, will also slip down the hierarchy by a notch.
The official said this has become necessary as the governor’s selection has been institutionalised through a Cabinet secretary-led process. Patel was shortlisted by the Financial Sector Regulatory Appointments Search Committee, chaired by the Cabinet secretary, though the final appointment was made by the Appointments Committee of the Cabinet, chaired by the Prime Minister.
Minister of State for Finance Santosh Gangwar informed Parliament in a written reply last month that from now on, “The committee will recommend names for appointment of chairperson and members of financial sector regulatory bodies, including those of the governor and deputy governors.”
It is difficult for a government panel to shortlist or conduct interviews for officers who will be senior to them by rank, the official said.
The finance and home ministries have been considering the change for some time but had decided to delay taking a decision. The proposal has finally been made. The change will not entail any amendment to the RBI Act and can be done by issuance of executive orders by the ministry of home affairs.
The proposed change is also in line with the view of the central government to not offer a minister-level position to any officer. There was internal debate on whether National Security Advisor Ajit Doval and Arvind Panagariya, the deputy chairman of NITI Aayog, should get the rank of a minister. It took considerable time for the NSA to be accorded the rank of a minister of state and the deputy chairman of a Cabinet minister. It was only in June 2015, a full six months after the NITI Aayog was set up, for Panagariya to finally get the full rank of a cabinet minister, that allows him to attend all cabinet meetings as a special invitee.
Rajan had argued with the government to maintain the position of the governor equivalent to that of a Cabinet minister, like the NITI Aayog chairman, and that of the deputy governor to ministers of state.
The official also said a change in the rank of the RBI governor could also smoothen relations in the regulatory architecture of the financial sector. Due to the higher rank of the RBI governor, it became difficult for the chiefs of the other regulatory bodies – of the markets, insurance and pension sectors -- to participate as equals in the deliberations of the financial sector development committee, he said.