Govt set to name new RBI governor when Modi returns from Africa
NEW DELHI: The new governor of Reserve Bank of India is likely to be appointed before the next session of Parliament begins on July 18. The announcement is expected once Prime Minister Narendra Modi returns from his Africa trip on July 11, finance ministry sources told HT.
“The preference is for someone who has international acceptance as an economist and has served the Indian government in some capacity,” sources said, referring to speculation that bankers would be preferred.
The stress on cleaning up bad loan-hit banks had led to this speculation.
“The RBI governor will have to have credence as an economist so a banker is out of the race. The announcement is likely to happen soon to end the speculation, which may dampen the mood,” said the source quoted above.
RBI governor Raghuram Rajan recently announced his decision to not seek reappointment when his three-year term ends on September 4.
Candidates being touted to replace him include State Bank of India chairman Arundhati Bhattacharya, RBI deputy governor Urjit Patel, former deputy governors Subir Gokarn and Rakesh Mohan, former economic advisor Kaushik Basu, tax expert Parthasarathi Shome, chief economic adviser Arvind Subramanian and economic affairs secretary Shaktikanta Das.
However, sources said the race may narrow down to Gokarn and Basu, both of whom have “strong international presence.” Gokarn is currently the executive director on the board of International Monetary Fund. Basu, who was earlier chief economic adviser to the finance ministry, is the World Bank’s chief economist.
The government has already clarified that the decision on a successor will be taken by the Prime Minister Narendra Modi in consultation with finance minister Arun Jaitley.
“The successor has already been decided, it is the announcement that has to be made. And it will be done before Parliament begins” the source said.