Managing the regulator

This refers to “Mint Road Vs North Block” (May 28). A K Bhattacharya has hinted at filling up of the existing fourth vacancy of RBI Deputy Governor with a serving civil servant who is conversant with the working of the finance ministry and/or PMO and the RBI to bridge the alleged gap between policy perceptions of the government and the RBI. Many would have even identified the person the writer has in mind, though one is not sure whether he/she is a candidate competing in the selection process underway to appoint the fourth RBI Deputy Governor.

Since September 2016, the media has been more open in speculating about the frictions between Mint Road and North Block. It is no secret that since the days Y V Reddy was RBI governor, till the last monetary policy statement, the government of India has been accepting the professional stance of India’s central bank on monetary policy issues. The same cannot be said about financial sector regulatory issues or even HR-related issues within the RBI in which GOI conveniently tries to use ‘ownership rights’ directly or indirectly which, sometimes embarrasses the RBI’s top management.

As mentioned in the article, traditionally, to balance various interests, the GOI has been taking care to have at least one career bureaucrat with excellent financial sector track record and another career banker who had experience as CEO of a big commercial bank among the governor and his deputies in RBI. The suggestion that a civil servantturned deputy governor is necessary for the RBI to have meaningful policy interaction with the GOI will take the debate to a different level, which is premature at this stage.

M G Warrier Thiruvananthapuram