 "K C Chakrabarty")
K C Chakrabarty has resigned as deputy governor of the Reserve Bank of India (RBI), three months before the end of his term. Chakrabarty, who is likely to join a global consultancy abroad and work in the area of risk-based supervision, will serve the central bank till the end of April.
In a letter to RBI Governor Raghuram Rajan, Chakrabarty cited personal reasons behind his decision to quit ahead of schedule.
Chakrabarty, 62, was appointed deputy governor at the central bank in June 2009 for a period of three years. In 2012, his term was extended by two years, till June 30, 2014. An RBI deputy governor can be appointed for a term of up to five years or till the candidate is 62, whichever is earlier.
Traditionally, among the central bank’s four deputy governors, two are from within RBI’s ranks. While the third is an economist, the fourth is a commercial banker.
As of now, H R Khan and Urjit Patel are the other RBI deputy governors. While Khan’s three-year term is set to end in July, he is eligible for an extension. The government is yet to announce a replacement for Anand Sinha, who retired as deputy governor in January.
To find a replacement for Chakrabarty, the government has already formed a search panel. The panel will interview five chief executives of public sector banks — K R Kamath, chairman and managing director of Punjab National Bank; Vijayalakshmi Iyer, chairperson and managing director of Bank of India;
S S Mundra, chairman and managing director of Bank of Baroda; R K Dubey, chairman and managing director of Canara Bank; and M Narendra, chairman and managing director of Indian Overseas Bank — by the end of this month.
Before joining the central bank, Chakrabarty had served as chairman and managing director of Punjab National Bank and Indian Bank.
Chakrabarty, who spearheaded the central bank’s financial inclusion efforts, was in charge of banking supervision and customer service. He was instrumental in doing away with the pre-payment penalty for floating rate home loans. Owing to the move, home loan borrowers can now transfer their loans to lenders that offer a better deal, without paying a penalty.
Chakrabarty also introduced dynamic supervision for Indian banks and has made the exercise an on-going process, as compared to yearly exercise practiced earlier.
