FinMin endorses 2yr extension for RBI's K C Chakraborty

Saikat Das
Moneycontrol.com

The ministry of finance has endorsed a two-year extension for K C Chakraborty as the deputy governor of the Reserve Bank of India (RBI). The proposal is now lying with the Appointment Committee of Cabinet (ACC) for its approval, said two sources who were privy to the development. However, the final notification is yet to arrive at the RBI headquarter here in Mumbai.

The outspoken deputy governor was an avid advocator of financial inclusion. Besides, his portfolio includes personnel management, administration, human resource development, rural planning, credit, currency management and banking supervision. Earlier in 2010, he was reportedly stripped of a few portfolios following his media remarks on the central bank's policy actions on inflation. Moreover, he is known as an excellent statistical skills and catchy oration.

"Last week, we heard that the ministry of finance has proposed his extension. However, any official notification is yet to come from the ministry. His rigorous effort to push for financial inclusion has perhaps earned him this extension. India will only prosper when larger number of citizens will enjoy banking services," a senior RBI official told Moneycontrol.com on condition of anonymity.

Chakraborty was appointed as deputy governor in June 2009 and his term ends on June 14. A RBI deputy governor can be appointed for five years and the retirement age is 62.

Meanwhile, there were speculations that Chakraborty might be the India representative in Asian Development Bank and the government was mulling over this proposal.  Accordingly, two names were being aired for the post of RBI. They included M D Mallya, CMD at Bank of Baroda and K R Kamath, CMD at Punjab National Bank. While the former is supposed to retire on November, 2012, the latter is likely to hang up his boots in 2015.

Also read: Govt asks RBI's Chakraborty to hold on for three months

With this likely extension, many bankers believe that the ministry may now speed up the process of appointing 17 executive directors, which is now over due.  The ministry had interviewed around 50-60 general managers across different state-owned banks in January.

saikat.das@network18online.com