RBI’s central board is set to see a total revamp with a host of members completing their four-year term. Industrialist Sunil Mittal of the Bharti group and GM Rao of GMR are likely to be the new faces in the reconstituted board. According to sources, the two businessmen have been sounded out for their consent for being considered for nomination.
The government had last reconstituted the central bank’s board in June 2006. At that time, Wipro chairman Azim Premji, Aditya Birla Group of Companies chairman Kumar Mangalam Birla, Ambuja Cement chairman Suresh Kumar Neotia and Sanjay Labroo of Asahi Glass were inducted as members in place of Ratan Tata, NR Narayana Murthy and KP Singh, who had retired.
Besides the industrialists, there will be other retirements as well although it is not clear whether any member will be reappointed. In 2006, Chartered Accountant YH Malegam, Supreme Court Advocate HP Ranina and Ashok S Ganguly, member, Investment Commission and Knowledge Commission, were reappointed.
Sources said there is a likelihood that the entire board may change, in which case the central bank will lose some long-standing experts like Mr Malegam, who have outlasted several governors and has been the most active member on the board of the central bank.
The government has the powers to nominate 10 directors on the RBI board as per section 8(1)C of the RBI Act, 1934. According to the RBI Act, the central board shall include the governor and at the most four deputy governors, four directors nominated from RBI local boards, 10 directors nominated by the government and one bureaucrat also to be nominated by the government. Most of the industrialists and experts are nominated by the government under Section 8(1)C of the Act, which provides for the appointment of 10 nominees.
While the board does not have any role in monetary policy, it is the ultimate body that governs the working of RBI. The central bank’s HR policies and employee benefits are determined by the board.
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