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The Reserve Bank of India (RBI) on Thursday said its board had approved the “broad contours” of a human resource (HR) restructuring plan. Though the plan includes the creation of a post of chief operating officer (COO) with deputy governor’s rank, the central bank remained non-committal on whether this had been approved by the board.
“The board approved the broad contours of the proposals. It also asked RBI to initiate a dialogue with the government on the additional post of deputy governor and the legislative changes that would be needed,” the RBI communication said.
However, nothing is expected to happen immediately, as existing norms stipulate four deputy governors in the central bank and the RBI Act has to be amended to increase that number.
Asked about RBI’s proposal on a COO, Financial Services Secretary G S Sandhu said in New Delhi once RBI sent the proposal, it would be discussed with the finance minister. “They (RBI) are also reorganising internally. After that, if they think there is requirement of a COO, they will send the proposal and the finance ministry will take a view,” he added.
The RBI board did not favour the central bank’s proposal that till the time the RBI Act was amended, an officer on special duty/COO post, with the rank of deputy governor, be created. A deputy governor is appointed by the government, and this has to be cleared by the Cabinet’s appointments committee, headed by the prime minister. It is learnt government nominees had opposed the interim arrangement.
An RBI newsletter dated June 15 had laid out the operational blueprint for the restructuring. “The blueprint proposed the creation of an additional post of deputy governor, which might be done through an appropriate amendment to the RBI Act and taken up with the government. Till the time the RBI Act is amended to create the fifth DG’s position, internally, RBI may create a post of OSD/COO of the rank of DG,” the newsletter said.
One of the challenges posed by the RBI-proposed interim arrangement is the central bank’s service rules are only applicable up to the rank of executive director. RBI had sounded the idea of creating the post COO in its committee of the central board; the committee, however, felt such issues should be taken up before the full board.
The board asked RBI to operationalise the HR restructuring while taking into account the “need to continuously keep communication channels open with stakeholders as the process moves forward”.
The RBI statement said it had been deliberating on a broad HR restructuring exercise to align the bank’s organisational resources and structures with the needs of the domestic economy and changes in the external environment. The proposals involve bringing functional synergies in operations by grouping departments into clusters and leveraging HR to bring about greater professionalism and specialisation. These also involve a more effective performance-management system and responsive and proactive skill and leadership development programmes.
The restructuring proposals and the grouping of departments into five functional clusters have been widely discussed at various levels in the central bank.
For the restructuring, RBI has set up three committees — one on organisational restructuring, headed by executive directors B Mahapatra and Deepak Mohanty; one on training and skill development, headed by executive director P Vijaya Bhaskar; and one on HR, headed by R Gandhi, recently promoted to the post of deputy governor.
The restructuring plan proposed organising RBI central office departments into five clusters — for regulation and banking services; supervision and risk management; monetary stability; financial markets and infrastructure; and operations and human resources.
