Did You Know: How The RBI Governor Is Appointed?
India’s central bank, the Reserve Bank of India (RBI), is responsible for the regulation of our country’s entire banking system. Falling under the purview of India’s Ministry of Finance, the RBI plays a lot of key roles in the economy, from issuing and supplying the Indian Rupee notes to managing foreign exchange reserves and acting as a banker to the government.
And quite naturally, appointing the head of the RBI, i.e., the governor, is a crucial task in itself. But who does this? Who appoints the RBI governor? Let us decode it all for you.
Who Appoints The RBI Governor?
The Reserve Bank of India’s Governor is appointed by the Prime Minister’s Office (PMO), upon the recommendation of the Union Finance Minister (who currently is Mrs. Nirmala Sitharaman), as per Section 8(1)(a) of the Reserve Bank of India Act, 1934.
A key role here is played by the FSRASC (Financial Sector Regulatory Appointment Search Committee), which generally holds the list of names who get interviewed for the post of RBI Governor.
Members of FSRASC include the cabinet secretary, the RBI Governor, the financial services secretary, and two or three independent external members. This committee also plays a similar role during the appointment of the SEBI Chairperson.
Coming back to the RBI Governor’s appointment, the chosen name from the interviews usually gets sent by the FSRASC to the ‘Appointments Committee of the Cabinet’, headed by India’s Prime Minister, for final approval. After the final nod, the RBI Governor’s appointment is confirmed.
Besides the Governor, up to four deputy governors of the RBI can be appointed by the central government, under the RBI Act. All of them can hold office for a period of not exceeding five years, each1. The tenure can also be extended.
List Of RBI’s Current Governors And Deputies
RBI Governor: Sanjay Malhotra
Deputy Governors: Swaminathan J, M. Rajeshwar Rao, T. Rabi Shankar, and Dr. Poonam Gupta
Complete List Of RBI Governors Till Date
| 1 | Sir Osborne Smith | 01-04-1935 to 30-06-1937 |
| 2 | Sir James Taylor | 01-07-1937 to 17-02-1943 |
| 3 | Sir C D Deshmukh | 11-08-1943 to 30-06-1949 |
| 4 | Sir Benegal Rama Rau | 01-07-1949 to 14-01-1957 |
| 5 | K G Ambegaonkar | 14-01-1957 to 28-02-1957 |
| 6 | H V R Iengar | 01-03-1957 to 28-02-1962 |
| 7 | P C Bhattacharya | 01-03-1962 to 30-06-1967 |
| 8 | L K Jha | 01-07-1967 to 03-05-1970 |
| 9 | B N Adarkar | 04-05-1970 to 15-06-1970 |
| 10 | S Jagannathan | 16-06-1970 to 19-05-1975 |
| 11 | N C Sen Gupta | 19-05-1975 to 19-08-1975 |
| 12 | K R Puri | 20-08-1975 to 02-05-1977 |
| 13 | M Narasimham | 02-05-1977 to 30-11-1977 |
| 14 | Dr. I G Patel | 01-12-1977 to 15-09-1982 |
| 15 | Dr. Manmohan Singh | 16-09-1982 to 14-01-1985 |
| 16 | A Ghosh | 15-01-1985 to 04-02-1985 |
| 17 | R N Malhotra | 04-02-1985 to 22-12-1990 |
| 18 | Venkitaramanan | 22-12-1990 to 21-12-1992 |
| 19 | Dr. C Rangarajan | 22-12-1992 to 22-11-1997 |
| 20 | Dr. Bimal Jalan | 22-11-1997 to 06-09-2003 |
| 21 | Dr. Y V Reddy | 06-09-2003 to 05-09-2008 |
| 22 | Dr. D. Subbarao | 05-09-2008 to 04-09-2013 |
| 23 | Dr. Raghuram Rajan | 04-09-2013 to 04-09-2016 |
| 24 | Dr. Urjit R. Patel | 04-09-2016 to 11-12-2018 |
| 25 | Shri Shaktikanta Das | 12-12-2018 to 10-12-2024 |
| 26 | Shri Sanjay Malhotra | 11-12-2024 onwards |
Source: https://rbi.org.in/Scripts/governors.aspx
RBI’s Board Of Directors
The RBI’s functioning is governed by a central board of directors, which is appointed by the Government of India, in line with the Reserve Bank of India Act2. It includes Official Directors, including the RBI Governor, and not more than four Deputy Governors, and non-official directors nominated by the government, including 10 Directors from various fields and two government officials.
Other members of the board include four directors, i.e., one each from four local boards constituted for Western Area, Eastern Area, Northern Area, and Southern Area, as per the RBI website.
Also, the RBI Governor, or in his absence, the Deputy Governor nominated by him, can have the authority of general supervision and oversight over the RBI’s affairs and business. They can exercise all the powers and perform all acts that the Bank itself is empowered to do.
References:
1. RBI, accessed from: https://rbi.org.in/Content/deputygovernors.html
2. RBI, accessed from: https://www.rbi.org.in/Content/Central.html
Want to stay at the top of your finances?
Join the community of 4 lakh+ investors and learn more about Grip, the latest financial knick-knacks, and shenanigans that take place in the world of investing.
Happy Investing!
Disclaimer - Investments in debt securities are subject to risks. Read all the offer-related documents carefully. The investor is requested to take into consideration all the risk factors before the commencement of trading. This communication is prepared by Grip Broking Private Limited (bearing SEBI Registration No. INZ000312836 and NSE ID 90319) and/or its affiliate/ group company(ies) (together referred to as “Grip”) and the contents of this disclaimer are applicable to this document and any and all written or oral communication(s) made by Grip or its directors, employees, associates, representatives and agents. This communication does not constitute advice relating to investing or otherwise dealing in securities and is not an offer or solicitation for the purchase or sale of any securities. Grip does not guarantee or assure any return on investments and accepts no liability for the consequences of any actions taken based on the information provided. For more details, please visit https://www.gripinvest.in/.
Registered Address - 106, II F, New Asiatic Building, H Block, Connaught Place, New Delhi 110001.
