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The Reserve Bank of India (RBI) has decided to appoint Anand Sinha, deputy governor, an advisor to the central bank for a period of three months after he retires on the coming Saturday.
This is the first time an RBI deputy governor would have an advisory role after retirement, though there are instances of executive directors (EDs, the rank lower to this) having one.
The move is aimed at keeping Sinha's guidance in completing the licensing process for new banks. The department of banking operations and development's job was to draft the final norms and do the initial screening of the applications; it is part of Sinha's portfolio as DG.
He was appointed a DG (RBI has three more) in January 2011 for two years; last year, this was extended by another 11 months. An exception was made in Sinha's case by relaxing the retirement age on a request from the governor, for the same reason mentioned earlier.
The government has also begun the process of finding a successor to Sinha, having interviewed eight of the EDs.
Raghuram Rajan, the governor, wanted to issue the new licences in January but the process got delayed, as more information was needed from the applicants. There was also a delay in information from the investigative and tax agencies. RBI now wants to complete the process by end-March.
A committee under former RBI governor Bimal Jalan is vetting the 25 applications, which range from business conglomerates to micro lenders. Corporate houses like the Birlas and Anil Ambani's Reliance Capital, non-banking finance companies such as L&T Finance and the Shriram Group, and micro finance agencies such as Bandhan have applied.
RBI has four DGs. Traditionally, two are promoted from within the ranks of RBI, another is an economist and the fourth comes from the commercial banks. The others are K C Chakrabarty, H R Khan and Urijit Patel. Chakrabarty, who was a commercial banker, will retire in June, after completing five years in RBI. Khan's three-year term will end in July, though he is eligible for an extension.
