New norms on cards for RBI Dy Governor

The government will prepare guidelines for appointments to the post of RBI Deputy Governor. The decision to this effect was taken by the Appointments Committee of the cabinet (ACC).

The Delhi High court, in a judgement delivered on September 27, had made a reference to such appointments.

The former RBI executive director, P K Biswas had challenged the appointment of Usha Thorat as the Deputy Governor.

In response to a faxed query, seeking its views on the judgement and current appointment practices, the central bank declined to comment on the premise that appointment of deputy governors was in the domain of the central government as per the provisions of RBI Act, 1934.

The judgement stated, "On the process adopted for filling up/appointment for the post of Deputy governor, an order has already been passed for preparing guidelines containing criteria and norms to be followed for the purpose. The ACC has accepted the aforesaid proposal.

Thus, guidelines would and should be prepared by the concerned ministry providing for and regulating the criteria and norms for consideration of the names of the eligible candidates".

Sources close to the development explained that at present, the Governor recommends the name of deputy governor. The proposal then receives the nod of finance ministry, home ministry and the prime minister's office.

The appeal cited that despite the provisions of section 7, 30 and 58(1) of the RBI Act, no guidelines have been framed either by the central government or central board of the Reserve Bank of India laying down the criteria and norms to be considered for appointment to the post of Deputy Governor.

The provisions of Section 8(1) (a) and section 8(4) of the RBI Act, 1934, stipulate that a governor and not more than four deputy governors will be appointed by the central government. The governor and deputy governor shall hold office for not more than five years.

However, the judgement has held that the post of deputy governor is not a promotional post, but an appointment to be made by the central government for a term not exceeding five years.