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The Government has given Dr D. Subbarao, two-year extension as the Governor of the Reserve Bank of India. He will hold office till 2013.
“The Prime Minister has approved the extension of the term of Dr Subbarao as Governor of the Reserve Bank of India for a further period of two years with effect from September 5, 2011 up to September 4, 2013,” said a statement from the Prime Minister's Office.
This move is meant to give an impression of stability to the economy, sources told Business Line . Secondly, in the current global economic situation, bringing a new person at the helm would not be seen as a wise step, they said.Though the Government has been maintaining that the term of regulators has been revised from three years to five years, the immediate past Chairman of SEBI, Mr C.B. Bhave, was not given an extension. Even Mr Bhave's successor, Mr U. K. Sinha, has been given a three-year term.
Finance Secretary before becoming the 22nd Governor of the RBI in 2008, Dr Subbarao steered the country through the economic crisis. He is credited with taking a tough monetary stance to check inflation. Under his governorship, the RBI doubled the frequency of monetary policy reviews from every quarter to eight times a year so as reduce the need for off-cycle rate moves.
Dr Subbarao had served in the Finance Ministry in the early 1990s when Dr Manmohan Singh was Finance Minister.
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