Speculations rife over dozen names to replace Rajan as RBI Governor

With Reserve Bank of India (RBI) Governor Raghuram Rajan unwilling to head the central bank for the second term speculations are riffing on who will succeed him. Over a dozen names doing the rounds, including that of Deputy Governor Urjit Patel, former CAG Vinod Rai, SBI chief Arundhati Bhattacharya and economists Rakesh Mohan. Though there was no official word, the rumour mills SBI chief Arundhati Bhattacharya is in the top of the list to lead the central.

Among the speculated names, Patel has been known as ‘inflation lieutenant’ of Rajan at RBI, while Bhattacharya’s tenure as SBI Chairperson also ends in September—the same month when Rajan would demit office.

Rai, the former Comptroller and Auditor General of India who is known to have flagged the 2G scam, is currently heading the newly-constituted Banks Board Bureau, set up to help the government appoint heads of public sector banks and advice on banking reforms.

The names doing the rounds also include Chief Economic Advisor Arvind Subramanian, World Bank Chief Economist Kaushik Basu, Revenue Secretary Shakatikanta Das, former Advisor to Finance Minister Parthsarathi Shome, BRICS Bank head and ICICI Bank veteran K V Kamath and Sebi Chairman U K Sinha.

Like Rajan, Sinha was made Sebi Chairman during the previous UPA regime but was given a surprise and rare extension by the NDA government in February days before his already extended tenure of five years was to end.

Other names being speculated are former RBI Deputy Governors Rakesh Mohan and Subir Gokarn, former Finance Secretary Vijay Kelkar, former CCI Chairman Ashok Chawla, former CEA Ashok Lahiri and noted economist R Vaidyanathan.

While most of these people could not be immediately contacted for their comments, Mohan said it is “premature to discuss” his candidature, while Bhattacharya had yesterday said that “Rajan is a person of very high caliber, who has built ably on the reputation of our central bank and given it a very large measure of credibility”.

Basu, also a former CEA, tweeted Rajan has been one of the finest central bank governors anywhere.

Rajan, who will have the shortest tenure as RBI Governor since liberalisation began in 1991, is also one of the few non-bureaucrats in this post as most of his predecessors had been IAS officers.

Traditionally, applications have never been invited for the post of RBI Governor unlike many other regulatory posts.

However, it is not clear as yet whether the shortlisting would be done by this panel, headed by Cabinet Secretary P K Sinha, or by the Appointments Committee of the Cabinet (ACC) as has been the case traditionally.

Rajan, an on-leave Professor of Finance at Chicago University whose current three-year term as RBI Governor ends on September 4, said last evening that he has decided to return to academia “on due reflection, and after consultation with the government” though his work was “yet to be completed” on containing inflation and cleaning up bank books.

Reacting to his decision, a number of industry leaders and economists have said it would be a tough task ahead for the person who succeeds Rajan as the next RBI Governor.