RBI Governor Shaktikanta Das’s Term Likely to Be Extended: Report

RBI Governor Shaktikanta Das’s Term Likely to Be Extended: Reuters, quoting unnamed sources aware of the development, said that the central government was likely to extend the term of RBI governor Shaktikanta Das. This would make Das the longest-serving head of India's central bank since the 1960s if granted.

Sources told Reuters that no other candidates are under consideration, nor any selection committee has been set up to choose Das's successor. Hence, the term of the current RBI governor is likely to be extended, the report said.

Another source privy to the development said that the decision on Das's extension will be made public after the assembly elections in Maharashtra get over on November 20. The moral code of conduct by the ECI bars the ruling party from making any ad-hoc appointments that could influence the voting behavior of the electorate.

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Reuters reports that the Finance Ministry, the Prime Minister's Office, and the central bank did not immediately respond to emails seeking comment. Sources say a final decision would be taken by the Prime Minister.

Who is Shaktikanta Das?

Das was erstwhile Secretary of the finance ministry. He took charge as the 25th Governor of the Reserve Bank of India on December 12, 2018. He also had a stint as member of the 15th Finance Commission and was G20 Sherpa of India.

As the head of its Central Board, based on exposure to eight as many union budgets handled during his long tenure at the finance ministry, Mr Das comes close to directly dealing with all that involves. Besides India's Alternate Governorship in the World Bank, Asian Development Bank (ADB), New Development Bank (NDB), and Asian Infrastructure Investment Bank, he also represents India in international bodies such as IMF, G20, BRICS, SAARC, etc.

Therefore, as the report tells us, the RBI governor appointment came at a time when there was strain in the central bank's relationship with the central government post-demonetisation on November 8, 2016.

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How is the RBI Governor appointed?

The head of the Indian central bank is appointed by the Central Government, as a provision in the Reserve Bank of India Act, 1934. The RBI governor is appointed by the Appointments Committee of the Cabinet, headed by the Prime Minister.

The qualifications, experience, and suitability for the post determine the shortlisting of candidates by the Department of Financial Services in the Ministry of Finance. The various sources also have recommendations from experts, bureaucrats, economists, etc.

Though there are no specific, detailed eligibility criteria as mentioned in RBI Act, persons with expertise in economics, banking, finance or public administration are considered by the government.

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