MUMBAI: The Centre has appointed Shirish Chandra Murmu as the next deputy governor of the Reserve Bank of India for a three-year term. The appointment comes in the wake of the retirement of M Rajeshwar Rao early next month. The Appointments Committee of the Cabinet, which is headed by the Prime Minister, on Monday approved his appointment, a government notification said on Monday.
The governor, and the four deputy governors of the Reserve Bank are appointed by the government and are government servants and not employees of the central bank. The appointment of Murmu, who is currently an executive director, will take effect from October 9. Murmu will replace Rajeshwar Rao, who is currently the senior most deputy governor in charge of banking regulation and other portfolios. Rao’s term ends on October 8.
The four deputy governors of the RBI are in charge of the four key departments, including monetary policy, financial markets regulations, banking supervision and regulations of the apex bank. Murmu’s portfolio allocation is yet to be announced. Murmu has beaten his two colleagues--Vivek Deep and Rohit Jain—who also gave the interviews to the Financial Sector Regulatory Appointments Search Committee, which interviews the top management of RBI and Sebi. The appointment is based on the recommendation of the search panel.
The outgoing deputy governor is in charge of the departments of regulation, enforcement, and legal, apart from coordination roles through the secretary’s department, risk monitoring department, and overall policy coordination, was initially appointed in 2020 for three years, which was later extended twice.
These departments are normally held by a career central banker who has risen from the rank of the RBI. Between January and May Rao was also in charge of the key monetary policy department after the government took too long to fill the vacancy created by the retirement of Michael Patra on January 14 and Poonam Gupta, whose appointment was cleared in April, could join only early May.
Patra was the first career central banker to rise to head the monetary policy department, as the deputy governor in charge of the monetary policy department has always been an economist from outside the Mint Road. The RBI Act 1934 mandates that the central bank to have four deputy governors--two from within the ranks, one commercial banker, and one economist to head the monetary policy department.
Murmu is the senior-most executive director who looks after the supervision department now, while Vivek Deep looks after currency management and payments, and settlement and Rohit Jain is in the department of supervision (risk, analytics, and vulnerability assessment).
While the age limit for a deputy governor is set at 60 as of January 15, 2025, the search committee has the discretion to relax this criterion for exceptional candidates. The FSRASC members typically include the Cabinet Secretary, the RBI governor, the financial services secretary, and two other independent experts.