Continuing the induction of non-monetary experts into the monetary policy operations of RBI, the government has inducted financial sector expert Shankar S Acharya as the fourth Deputy Governor of the RBI. In the notification showing the appointment, Sri. Acharya has entrusted with the Monetary Policy and Research cluster, a relatively academic body rather than having any policy development content.
Mr Acharya was serving as Professor, at the Department of Finance, New York University and is a PhD holder in Finance. Interestingly he was a member of the Financial Sector Legislative Reforms Committee that recommended government control over of the RBI’s Monetary Policy Operations through the formation of the Monetary Policy Committee.
Interestingly, Sri Acharya was not given the charge of the critical Monetary Policy Department which has been vacant after Urjit Patel was promoted as the Governor. The MPD is now temporarily placed under R Ganghi who is another Deputy Governor. Usually, the Deputy Governor will be in charge of a serious job like in charge of either of the four departments- Monetary Policy, Financial Market, Issue and Banking.
Appointment of Acharya indicate the reinforcing trend of business and finance occupying the RBI top posts. The demonetisation programme which was implemented as a non-technical exercise without the participation of any monetary experts is mainly shown as an effort by the outside beurocracy to occupy RBI’s functions. Similarly, it is shown as an instance of declining control of the RBI regarding monetary policy and issue operations.
RBI has four deputy governors and the other three are: Shri N. S. Vishwanathan, Shri S. S. Mundra and Shri R. Gandhi.
Gandhi heads the departments of currency management, economic policy & research, external investments & operations, financial market operations, foreign exchange and internal debt management besides having temporary responsibility of the Monetary Policy Department. SS Mundra is in charge of the departments of banking supervision, co-operative banking supervision and non-banking supervision. NS Vishwanathan supervises the departments of banking regulation, communication, co-operative banking regulation and non-banking regulation.
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