NEW DELHI: After appointing S Gurumurthy and Satish Marate on the board of the Reserve Bank of India (RBI), the government is looking at a firmer influence over the central bank’s apex decision-making body by nominating individuals who argue its case better. It is also reviewing continuation of some of the directors on the central board who had earlier moved from RBI’s regional boards.
The government believes that the current set up is completely tilted in favour of the RBI management led by the governor, with two official nominees — secretaries for economic affairs and financial services — usually finding themselves in minority. As a result, the BJP government opted to nominate Gurumurthy, a Swadeshi Jagran Manch ideologue, and Marathe, a co-operative movement leader, as part-time members to push its case.
Sources told TOI that developments at the first board meeting attended by them saw the government’s point of view being taken on board at least on two aspects — the Rs 50,000-crore surplus transfer to the Centre as well as a review of the prompt corrective action norms for weak banks. The finance ministry believes that the regulator significantly tightened rules that have hit the staterun banks hard and is looking for a relaxation.
While the finance ministry has several grievances, some more issues are expected to be raised at the next board meeting, the sources said.
Apart from five full-time directors — RBI governor and four deputies — the government nominates two finance ministry officers, apart from 10 part-time members. Currently, there is no vacancy on the board, but sources said some of the changes could be effected when the vacancies arise. The first vacancy arises in March 2020 when the fouryear term given to Tata Sons chairman N Chandrasekaran, former Mahindra CFO Bharat Doshi and retired bureaucrat Sudhir Mankad is scheduled to end.
Sources said continuation of some of the members, who moved from regional boards, is being reviewed. While Nachiket More, who heads the Bill & Melinda Gates Foundation, had moved to the central board in August 2017 and was given a four-year term, Sun Pharma MD Dilip Shanghvi and former bureaucrat P K Mohanty were appointed last February with their tenure due to end in 2021. RSS-affiliate SJM has been demanding Mor’s removal, citing a possible conflict of interest.