The Finance Ministry has asked the Reserve Bank of India’s Deputy Governor Subir Gokarn to continue till December 31. His three-year term was scheduled to end on November 23.
The Financial Services Secretary D. K. Mittal announced his extension saying that there should not be vacancy. A search committee has been constituted to advise whether Gokarn will get another two-year term or there will be a new Deputy Governor.
The Reserve Bank of India Act of 1934 prescribes appointment of a Governor and a maximum of four Deputy Governors. All of them are appointed by the Central Government. One of these Deputy Governors is preferably from the category of eminent economists and Gokarn belongs to that category. The other three Deputy Governors are, K. C. Charabarty, Anand Sinha and H. R. Khan.
The Act also provides that the Governor and a Deputy Governor will hold office for term not exceeding five years as the Central Government may fix when appointing them, and will be eligible for reappointment.
Recently, Chakrabarty was reappointed for a further two years. The Governor and the Deputy Governors can continue till they attain the age of 62 years or until further orders.
Bank Recapitalisation
Mittal also informed that the Finance Ministry will soon finalise on pumping additional money into state-run banks. This year the Budget provided for around Rs 15,000 crore for bank recapitalisation. Various banks, including State Bank of India, may be benefited by this move.
The Government is also considering a proposal for banks to issue rights shares worth Rs 15,000 crore to raise additional capital, Mittal added. The banks need to raise funds to increase lending and to meet new capital requirements under the Basel III rules that are being implemented in stages.
Though the Planning Commission had advised to defer this expenditure for next year, the Finance Minister P. Chidambaram, on November 15, had reaffirmed that the Government will infuse additional capital.
Among the various banks, Indian Overseas Bank, Central Bank of India, and Bank of Maharashtra will benefit from recapitalisation, he added.
Comments:
When will we learn to do things like implementing succession plans for top government/public sector jobs with professionalism and efficiency in a graceful manner?
We all talk highly about the virtues of private sector, but do we really allow public sector imbibe its good features? This is a rarity. How else can one explain the difference in the selection procedures of successors for Ratan Tata and N R Narayana Murthy and those for finding CEOs and top managers of public sector organizations? Another point is that
it will be next to impossible to attract talent to these government positions, given the meager remuneration offered. It is time to revise this factoring in market realities. The present practice has resulted in compromises on quality.
It suits Govt to have people who have no other place to go or those who find the postings as a stepping stone for career opportunities abroad, at the top of institutions which it wants to tame.
As long as the salary structure of any executive is tagged to that of the IAS cadre and with IAS cadre not wanting to loose their strings, it is difficult to attract talent to the PSBs. Further the Finance Ministry wants to treat all PSBs equally with the wage structure remaining the same irrespective of the fact whether he is working in Andhra Bank or in Bank of Baroda. The salary structure should be based on the profit earned by that organisation. It should be based on the risk adjusted income generated by that bank.
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