In a first, cab secy-led panel recommended guv

NEW DELHI: The government, which appointed Urjit Patel as the new RBI governor, based its decision on the recommendations of a search panel.

The financial sector regulatory appointment search committee (FSRASC) — headed by cabinet secretary PK Sinha — set up last year, shortlisted more than a half a dozen names for the post. However, Prime Minister Narendra Modi in consultation with finance minister Arun Jaitley, took the final decision.

Sources said the panel shortlisted names of all possible candidates for the top job. However, the list was then pruned and finally only four names were sent to the government for the final decision.

The final list was sent to the government more than a month ago. “While the government took the final call, the committee provided that list, so the process has been much fairer and it is a shift from the selection-based approach,” said Rajiv Kumar, senior fellow, Centre for Policy Research, who is one of the three external experts of the FSRASC.

An official statement said: “The appointment has been made based on the recommendation of the FSRASC headed by cabinet secretary. The committee undertook an extensive exercise to suggest a panel of names to the ACC (Appointments Committee of the Cabinet).”

The new search system provides the Modi government an opportunity to underscore its support for an independent process to maintain the autonomy of the central bank.

“It sends a strong message that RBI will remain an autonomous body and that there will be no compromise in the selection process, and the best person will get the job,” an official source said.

“The panel undertook thorough technical scrutiny to ensure that the best people were shortlisted,” Kumar added.

Patel, an able deputy of Rajan, has authored the monetary-policy framework. He also headed a committee that in 2014, which recommended targeting retail inflation to tame unstable prices, shifting the focus away from wholesale prices.