The Indian government began interviewing candidates for a new central bank deputy governor this week, less than a month after appointing a new head to the Reserve Bank of India and weeks before a crucial interest rate decision.

The applicants interviewed so far included well-known academic economists and the chief economic adviser in the Finance Ministry, according to people familiar with the matter. 

A six-member selection panel — which includes new Governor Sanjay Malhotra and Cabinet Secretary TV Somanathan — held the first round of interviews on Jan. 13 in New Delhi and is expected to hold a second round on Wednesday, the people said, asking not to be identified because the discussions are private.

Among the candidates interviewed so far:

  • Poonam Gupta: Former World Bank economist and part-time member of the Prime Minister’s Economic Advisory Council
  • Chetan Ghate: Well-known economist who was a former external member on the RBI’s monetary policy committee
  • Prachi Mishra: Director and head of the Isaac Centre for Public Policy at Ashoka University
  • Ajit Ranade: Noted economist who has previously served on an RBI committee on full capital account convertibility
  • N R Bhanumurthy: Director of the Madras School of Economics
  • V Anantha Nageswaran: Chief economic adviser in the Finance Ministry, who has argued for a change in the RBI’s inflation target to exclude food

The selection panel is expected to submit a short-list of the candidates to Prime Minister Narendra Modi and Home Minister Amit Shah, who have the final say on the deputy governor post, the people said. The list may include other names.

A spokesman for the Finance Ministry declined to comment when contacted for further information, while the RBI didn’t immediately respond to an emailed request for comment.

The new deputy governor will replace Michael Patra, who was in charge of the monetary policy department and whose four-year term came to an end on Tuesday. He was one of three central bankers on the six-member monetary policy committee, which decides interest rates. 

The MPC will undergo an almost complete overhaul by the time of the next rate decision on Feb. 7, with five of the members relatively new. The policy meeting will be the first chaired by Malhotra after his appointment in December, while three new external members joined in October. 

Many economists are betting the new MPC will cut interest rates in the first policy meeting of the year to help support a slowing economy and as signs point to an easing in inflation pressure. However, rising oil prices and the rupee’s plunge to record lows have complicated the outlook.

The candidates interviewed so far for Patra’s post don’t include any internal RBI officials, a departure from past practice. Typically, the RBI has reserved two of the deputy posts for internal appointees, one for a commercial banker, and another one for both external and internal candidates. 

The other three deputy governors at the RBI are: M Rajeshwar Rao, T Rabi Sankar — both career central bankers — and Swaminathan Janakiraman, who was a managing director of State Bank of India before joining the RBI.

After Patra’s departure, Rao was given temporary responsibility for the monetary policy department, according to a statement from the central bank.

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Published on January 15, 2025