Rajan pushes through major organisational revamp in RBI

Ahead of the Reserve Bank of India's annual conclave in the hill station of Mussoorie at the end of this month, governor Raghuram Rajan has finalised organisational restructuring of the central bank - a plan he initiated during last year's retreat at Udaipur.

One step taken is reassigning the responsibilities of deputy governors under four new clusters. He has also sought the appointment of a fifth deputy governor by the government through an amendment of the RBI Act.

A key element of RBI's restructuring is the separation of supervisory and regulatory functions. It also involves the merging of some departments, but the central bank has made it clear that there will not be any redundancies.

The RBI is also expected to induct some lateral talent as part of its skill-building exercise. It set a precedent on Tuesday when it interviewed 12 candidates for lateral recruitment to a Grade F officer, that is chief general manager (CGM), in its economic policy and research department..

Deputy governor H R Khan will be responsible for the organisational cluster that has been defined as financial markets and infrastructure. These include departments like external investment, government accounts, payments and settlements, foreign exchange and internal debt management.

Deputy governor Urjit R Patel continues to hold charge of monetary policy and research, which will include departments of communication, economic and policy research, financial market operations, and monetary policy department.

The newly christened department of banking regulation, which comes under the 'regulation and risk management' cluster, is part of deputy governor R Gandhi's portfolio. Gandhi is also responsible for regulation of finance companies, deposit insurance, the financial stability unit, currency management and risk monitoring.

Deputy governor S S Mundra will oversee department of banking supervision, consumer education and protection, financial inclusion, human resource and development and cooperative bank supervision.

Last week, the RBI announced that it has promoted three senior officials as executive directors - M D Patra, K K Vohra and G Mahalingam. While one promotion was to an existing vacancy, the other two are against additional positions created due to the restructuring.

The central bank had kicked off the restructuring exercise after its board of directors gave an approval in its meeting on 14 August.