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Rajeshwar Rao, Lily Vadera front runners for Reserve Bank of India Deputy Governor post

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MUMBAI: Reserve Bank of India executive directors M Rajeshwar Rao and Lily Vadera are top contenders to succeed NS Vishwanathan as the central bank’s fourth deputy governor, people familiar with the selection process said.

Rao, a career central banker has spent 36 years at the RBI across various departments including regulation and supervision and different regional offices of the regulator.

Currently, he is in charge of the internal debt management, financial markets operations, international and secretarial departments at the central bank. His vast experience makes him a front runner for the post.

Vadera, the other top contender, has also spent her career at the RBI and is in charge of the crucial department of regulation, which gives her an edge in case the government seeks continuity.

Bankers are viewing this post with interest as the new deputy governor will oversee the regulation department, which sets rules and regulations for the financial sector.

“This is arguably the most important position in the RBI and second only to the governor because it is ultimately the regulations that come from here which banks and NBFCs have to follow. What is important to note is that it has taken close to five months and counting for the government to fill such an important post,” said a senior banker.

The position fell vacant in March after Vishwanathan resigned before the completion of his term in June citing health reasons.

The Financial Sector Regulatory Appointment Search Committee (FSRASC) which includes the cabinet secretary, RBI governor and the financial services secretary interviewed candidates on August 21. The selected candidate has to be approved by the appointments committee of the cabinet headed by the prime minister. Deputy governors are appointed for a three-year term.

“It is totally the government’s call. The RBI governor can suggest but finally, the government will decide. Even the central bank comes to know of the appointment via a government notification when its made public,” said a person familiar with the process.

Rabi Narayan Mishra, another career central banker and currently in charge of one half of the supervision department could also be a contender for the job, bankers said.

The RBI currently has three deputy governors, two of whom are from the central bank.

Deputy governor BP Kanungo who came through the RBI ranks is currently in charge of internal debt management, foreign exchange, currency management and payment and settlement systems among others. Kanungo’s term ends next April after a one-year extension given earlier this year.

Michael Patra was appointed as deputy governor in January replacing Viral Acharya who resigned in June 2019. Patra is in charge of the crucial monetary policy department along with regulation and operations of financial markets.

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