The Reserve Bank of India (RBI) has the distinction of playing an important role in shaping India’s economy. As the central bank of the country, it holds tremendous power and helps to secure the legacy of India’s financial landscape. The RBI has the power to manage the circulation of currency within the country. They also supervise the role of the banking sector all the while regulating the monetary policy within India. Sitting at the apex of this vast institution with some of the most important responsibilities that shape a nation is the governor of the Reserve Bank.
The Reserve Bank governor is one of the most powerful and distinguished posts in the country. It is not one that can be won overnight. The position, as a very high profile one, requires that the person chosen for the job has relevant experience and enough work history to lead the RBI. There used to be a time when Civil Service officers who had a very strong and solid work profile were given the post. But now that has changed. Today, a person with a graduate/post graduate degree or a Charted Accountant can ascend to this position. The only prerequisite is that they need to have enough work experience and achievements to make a high-profile career. A degree in economics can also work to an advantage.
There are a lot of allowances and benefits that come with this position. Through this blog, we will take you through the steps that are needed to become an RBI Governor. s prestigious position comes with various allowance, benefits and above all pride. The listed below are some of the expected career histories to become the governor of RBI.
Eligilibty Criteria Required for an RBI Governor
Becoming an RBI Governor is not as simple and an easy procedure as one would think. You don’t just give in your CVs and expect to be called for an interview. There are some prerequisites and conditions that a person who wishes to be the RBI governor needs to have. In order to become the RBI Governor, candidates need to possess the eligibility criteria, certain conditions and some specific work experience. All the prerequisites and conditions needed for an individual to be chosen as the RBI governor are given below:
Experience National and International Organizations
One of the first prerequisites for anyone wishing to be chosen as an RBI Governor needs ample work experience with some national and international organizations to be able to handle the responsibility of regulating the finances of a nation. Working experience with the International Monetary Fund is one of the most important conditions that need to be fulfilled. Besides that, hopefuls are also expected to have had working experience in the Indian Finance Ministry. Besides that, they also need to have had experience of working in the banking and financial industry. Another prerequisite they need is that they need to have served as a chairman or the general manager of a bank. Finally, hopefuls for the post of RBI Governor also should have working experience in a Reputed financial or Banking organization.
Nationality and Other Conditions
Besides working experience in national and international organizations, anyone hoping to become the Governor of the RBI must first be the citizens of India. Secondly, they should be between the ages of 40 to 60 years. Keeping in mind the conditions mentioned earlier, the candidates’ working experience should be a minimum of 20 years in banking, financial sectors, economics or even in finance. This includes experience with international and national organizations. This means they need to have held senior positions in these organizations or even in academic organizations. Having leadership experience in these organizations would also be an added advantage. In addition to this, the candidates must not be affiliated with any political party or organization or ideology.
Skills Required for the Position
Besides work experience, age and organizational experience, candidates hoping to be chosen for the role of an RBI governor must possess certain skillsets. One of the most obvious ones is the in-depth knowledge of finance, economics and the banking sector. Since the position is strongly based on making decisions on the country’s monetary regulations, an in-depth knowledge of economics and finance is a natural progression for the job. Another skill that is required is top-notch leadership and managerial skills. Since the position expects the candidate to lead the central decision maker when it comes to Indian finance and monetary policy, leadership skill is only to be expected.
Besides these two abilities, the chosen candidate is expected to be able to form and create monetary policies which will be beneficial for the economy. Along with that, the ability to work smoothly and in sync with government officials, regulators and important stakeholders is also an added advantage governor hopefuls must, along with these qualities be able to use their financial and economic knowledge to adapt and implement changes as per the situation. All these skills must be in sync with their own integrity and ethical standards. It should be noted that those who are looking to be the RBI governor must beware that the selection to this post is done by the ACC or the Appointments Committee of the Cabinet. It is based strictly on their qualifications, experience and suitability for the position.
Roles and Responsibilities of RBI Governor
Before you consider how you can become the RBI governor, you need to know what the duties entail. And it goes above and beyond making random decisions based on financial knowledge. So, let’s take a look at the roles and responsibilities of an RBI governor.
- One of the most important roles of the Governor of the Reserve Bank of India is their responsibility towards new banks in the country. This includes regulating their functionalities and issuing licenses to the said bank
- You should also be aware that the economic stability of the country is maintained and monitored strictly by the RBI governor. This is one of the most important roles of the rBI governor and at any time, the governor and their team has the power to make changes to RBI policies if it compromises the economic stability of India.
- Along with that, the RBI governor is also responsible for the credit flow in rural, agricultural and other MSME sectors.
- In addition to this, RBI governors also must administer and monitor state cooperative banks, regional rural banks, private banks and other local area banks
- Along with this, the RBI governor also makes a lot of major financial decisions that will benefit the country
- In addition to this, by the order of the foreign exchange management act 1999, the RBI governor develops and maintains the foreign exchange market in India. They also have responsibility for controlling the financial systems in the country.
- You should know that the RBI governor also has the power to change the banking systems and policies for smoother functioning and better operations for citizens of India.
Methods of RBI Governor Appointment
Anyone looking for a career with the Reserve Bank needs to be aware that all the affairs of the organization are operated and monitored by a Central Board of Directors (CBD). All the members of the board are chosen by the Indian Government as per the norms of the Section 8 of the Reserve Bank of India Act. The CBD is for all intents and purposes the administrative authority for the RBI with two sets of directors, the official and non-official directors.
To put it simply, the official directors consist of the governor, and at least four deputies who are chosen by the Indian government in accordance with the RBI Act. Along with the official directors, there are fourteen non-official directors, of whom the Government can appoint two chosen people into the CBD.
Appointment and Term in Office of RBI Governor
The Governor and their deputies have authority over their office for a period of time that should not exceed five years. The term is usually fixed by the government at the time of their appointment. To put it into perspective, Urjit Patel and Raghuram Rajan were appointed for 3 years, even though they can get a five-year tenure. The governor can be reappointed as per the special terms of the RBI Act. The reappointment or the time period extension of the RBI governor is a decision that is taken solely by the government.
When it comes to choosing the RBI governor, we have already talked to you about the usual prerequisites and background of the RBI governor. A person with a different educational background can be chosen as governor but they need to have a background in the economics or financial management along with organizational experience with either Indian Governments or with international organizations. This just means that the qualification for the position is a matter of convention and is not a hard and fast rule. Usually, the appointment is made by Civil Service Personnel or an Economist, the former holds true if the said person comes with a solid background in economics management. If you want to know more about the profiles of RBI governors, we have provided it in the table below. Out of all the RBI governors, only 7 were economists while 14 of them were Civil Servants.
| Name of the Governor | Profile |
| Osborne Smith | Banker |
| James Braid Taylor | ICS |
| CD Deshmukh | ICS |
| B Rama Raju | ICS |
| KG Ambe Gaonkar | ICS |
| HVR Iyengar | ICS |
| PC Bhattacharya, | IAAS |
| LK Jha | ICS |
| BN Adarkar, | Economist |
| S Jagannathan | ICS |
| NC Sen Gupta | ICS |
| KR Puri | MD LIC |
| M Narasimham | RBI Officer |
| IG Patel | Economist |
| Manmohan Singh | Economist |
| Amitav Ghosh | Banker |
| RN Malhotra | IAS |
| S Venkitraman | IAS |
| C Rangarajan, Economist | Economist |
| Bimal Jalan | Economist |
| YV Reddy | IAS |
| D Subbarao | IAS |
| Raghuram Rajan | Economist |
| Urjit Patel | Economist |
| Shaktikanta Das | IAS |
Summing Up
Becoming an RBI Governor can only happen after you give in years of dedication, get the expertise you need, especially in the fields of economics, finance, and public policy. It means you need to be a person who has the right amount of academic qualifications, work and professional experience, leadership skills and a near absolute understanding of economic and monetary policies that make a nation like India what it is. Sure, there does not exist an actual predetermined path that will help you get this prestigious position. But if your long-term goal is to be at the apex of India’s financial regulatory body, then you need follow the kind of career path that will provide you the experience and understanding you need for this. This includes plenty of work experience in similar roles, a deep understanding of monetary and financial policies and most importantly, the right blend of leadership skills and ability to adapt your learnings into practicalities.
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