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The employees union of the Reserve Bank of India (RBI) says Governor Raghuram Rajan was sympathetic to their concerns on the impact of the changes suggested by the Financial Sector Legislative Reforms Commission (FSLRC).
They say he assured union heads of resistance to the legislative changes suggested in the panel’s report which might affect staffing and promotions.
The FSLRC has made recommendations regarding regulatory oversight and appropriate size and scope of regulators, which Rajan had publicly questioned. He’d argued the suggestion of checking the activities of regulators through judicial oversight could vitiate flexibility, while the idea of splitting of regulators needed more empirical evidence.
According to a statement issued by the United Forum of Reserve Bank Officers & Employees, Rajan had referred appreciatively to a recent public statement of Deputy Governor H R Khan that public debt should be continued to be managed by RBI.
The meeting with the unions came after the central bank’s board asked it to discuss the issue of internal restructuring, also mooted by Rajan, with all stakeholders. “It advised RBI to operationalise the restructuring (ideas), while taking into account the need to continuously keep communication channels open with stakeholders as the process moves forward,” the central bank had recently stated.
The internal restructuring plan included creation of a fifth deputy governor (DG) and two more executive directors (EDs), besides lateral recruitments in specialised areas. At present, the law permits RBI to have four DGs, appointed by the government. To increase the number, the RBI Act needs to be amended. Till this is done, it was suggested by RBI that it appoint a chief operations officer (COO) with a DG’s rank. The RBI board, which includes government nominees, however, ruled out any such interim arrangements.
The issue of COO and lateral recruitment was also discussed with the governor and the DGs, the officers' union said.
“The governor wanted to hear our opinion and concerns on restructuring, prefacing that world-wide central banks are changing themselves to align to the needs of achallenging banking scenario. When we pointed out some grey areas and apparent inconsistencies, he assured that there would not be any merger of cadres, as also no discrimination in promotion opportunities for all,” stated the union.
The restructuring exercise includes creation of two more EDs, one each from the research and general cadre. There is a concern among the general cadre that research executives will get faster promotions.
A recent RBI advertisement invited applications from external candidates for the post of a chief general manager. The minimum age requirement is 35 and that surprised many, including the government.
The union said the governor suggested another discussion shortly to sort the areas of concern.
