Mumbai, Mar 21: The Centre is planning to raise the retirement age of Reserve Bank of India deputy governors from the present level of 60 to 62. With this development, both the deputy governors, SP Talwar and Jagdish Capoor, who are scheduled to call it a day in June, are likely to get two years extension automatically, drawing curtains to the succession drama.
According to sources in the finance ministry, the proposal for raising the retirement age limit by two years has been mooted by RBI governor Bimal Jalan. "The Government has seen the logic behind the move. The file is likely to be cleared by the PMO soon," sources said.
The objective behind the move of raising the retirement age to 62, bringing the deputy governors on a par with chief justices of high courts, is to give the "regulators" a slightly longer tenure than commercial bankers.
Currently, the retirement age of bank chairmen as well as RBI deputy governors is fixed at the same level -- 60, while the RBI governor can continue up to 65through extensions. "Ideally, an RBI deputy governor should have a longer tenure than a bank chairman. Besides, once the retirement age limit is raised, commercial bankers also will get an opportunity at the RBI even after completing their tenure as bank chairmen, which is not possible now," sources said.
Going by the convention, one commercial banker, an IAS and an insider occupy the three deputy governors' posts. Among the three current DGs, YV Reddy is an IAS (from the banking division, ministry of finance) and economist while Talwar is a commerical banker (his last posting was chairman, Bank of Baroda) and Capoor an insider (who had a stint as UTI chief on deputation). Till November 1997, the fourth deputy governor's post was also occupied by an IAS.
Capoor handles exchange control, rural credit, industrial and export credit and internal administration, while Talwar's portfolio includes department of banking operations, supervision of banks as well as non-banking finance companies, internal inspectionand information technology.
Reddy, who stepped in SS Tarapore's shoes, is in charge of monetary policy, exchange rate management, internal debt and the department of economics.
According to sources, Reddy -- who was widely believed to take over as finance secretary till the last moment when Vijay Kelkar emerged as the dark horse -- may get a berth either in the International Monetary Fund (IMF) or the World Bank later this year. In that case, internal candidate RBI executive director A Vasudevan may get the nod to become the third deputy governor as he is the senior most executive in the third tier of the central bank.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.