For the first time in its 75-year history, the Reserve Bank of India (RBI) might hire professionals from outside for specialised activities such as derivatives and risk management. The move could pave the way for entry of experts from global institutions in the central bank.
According to top central bank sources, RBI is planning to laterally induct professionals in various functions at the mid-management level, that is, at general manager and chief general manager levels. These officials will be able to join either on contract or on RBI’s pay scale.
At present, only the governor and two of the four deputy governors are inducted laterally. All others are promoted from within.
RBI’s top brass, which will meet for its annual retreat later this month to brainstorm on several matters, will also discuss the issue of lateral recruitment. After that, the proposal will be put up before the central board. The central bank is planning to start the process from the next financial year.
To start with, RBI will only fill vacancies with outside professionals. According to RBI’s internal estimate, employee attrition (apart from retirement) is 10-15 per cent.
On why the central bank was looking for outside professionals, the source said, “We regulate various entities and we are not conversant with all their functions. By hiring professionals from outside, we will able to understand the various complex functions that these entities undertake.”
Among areas where professionals from outside will work are reserve management, which comes under the department of external investments and operations; derivates, which comes under the foreign exchange department; inspection and audit and risk management, both of which fall under department of banking supervision.
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RBI officials say remuneration will not be an issue and professionals from the private sector will give a huge response. “On a cost-to-company basis, the remuneration is not that low. For example, the cost-to-company in case of a CGM is Rs 30 lakh per annum, which includes accommodation and vehicle,” the source said.
However, the decision to get people from outside is expected to meet with strong opposition from the existing employees.
Some RBI officials says inter-department transfers in the organisation happen in such a way that there is no scope for specialisation. The maximum period an RBI official can stay in a regional office is five years, while an official can stay for a maximum 10 years in the central office.
However, inter department transfers are frequent in both regional and central offices.
“RBI is not allowing its people to specialise. And now, it want to hire specialists from outside,” an official said.
In addition, some official said while most global organisations failed, RBI was able to neutralise the effect of the global meltdown on the Indian financial sector. So, what was the point in bringing in people from organisations that failed, they said. They also do not rule out the possibility of lack of transparency in the hiring process.