The Reserve Bank of India (RBI) holds immense prestige for being the Central Bank of India. While playing an important role in a strengthened economic structure by forming significant monetary and financial policies, RBI is also a sought after organization to work for among aspirants. But it takes a lot of effort for aspirants to get into it. RBI Grade B, and RBI Assistant are some of the major posts for which RBI organizes recruitment drives every year through which a candidate can enter RBI. However, there are many other posts that RBI recruits every year.
Apart from all the posts, the post of RBI Governor is something that draws attention the most. The post holds ultimate prestige, power and accountability. But most people wonder if there is any specific process to become an RBI Governor, or if the RBI Grade B post can lead you through that position. The assumptions are endless. But if there is a position, there must be a process to be there. In this blog, we are going to uncover the process or eligibility that is required to become an RBI Governor and also throw some light on whether RBI Grade B Officer could become an RBI Governor or not.
First of all, let us start with knowing about the appointment in an RBI Governor position in general.
Appointment in an RBI Governor Position: A Brief
The Central Board of Directors (CBD) oversees the operations of the Reserve Bank. The members of the Board are appointed by the Government of India in accordance with Section 8 of the Reserve Bank of India Act. In addition to official directors, the CBD may have up to fourteen unofficial directors. The government can appoint two cabinet ministers in the CBD.
The CBD, as the top administrative arm of the RBI, has two sets of directors. The first is the official directors and the second is the unofficial directors.
The Official Directors are Governors and not more than four Lieutenant Governors are appointed/appointed by the Central Government under the RBI Act. So RBI governors are appointed by the government.
Tenure of an RBI Governor
The governor and lieutenant governor hold office for a term not exceeding five years. The Government may fix the term of office of the Governor upon appointment. (Urjit Patel and Raghuram Rajan are appointed for three years; though the governor can have a five-year term). The Governor (also Lieutenant Governors) is eligible for reappointment or extension. Section 8 (4) of the RBI Act defines the tenure of Governor and Deputy Governor. “The governor and deputy governor are eligible for re-election for a term not exceeding five years as may be fixed by the [central government] in appointment.” (Section 8. 4. – Composition of the Central Committee, and tenure of Directors., p. 17, RBI Act, 1934).
Qualifications Required to Become an RBI Governor
However, there are no dedicated qualifications specified to become an RBI Governor. But there is a standard for an ideal representative of the RBI Governer must possess. There are 25 Governors that have been appointed till date in the history of RBI. Each of them was from different educational backgrounds. We have a dedicated blog on the List of RBI Governors of India, you can read about them there. Furthermore, there is a common thing in the background of every RBI Governors till now. Every RBI Governor has a solid background in Finance and Economy. They have worked either finance or economic sector with Indian Government like Secretary of Economic Affairs, Financial Secretary, etc. Therefore, the standard to become an RBI Governor is that one must possess a strong educational or professional background in Finance and Economy.
Apart from that if a Civil servant has any economic experience, then he/she is also eligible to become an RBI Governor. The present RBI Governor, Dr, Shaktikanta Das holds a Post Graduate Degree in History. But he has a solid professional background in and held major role in the Ministry of Commerce before his tenure as RBI Governor. In his entire career, he has worked as a Project Director for the Index of Industrial Production (IIP), General Manager at the Ministry of Commerce and Industry, Director in the Ministry of Commerce, Joint Secretary in the Ministry of Civil Supplies, Executive Director in the National Small Savings Fund and as Director at the Institute for Financial Management and Research.
Out of the 25 Governors of RBI till now, 14 of them were Civil Servants and only 7 of them were economists. So, we can conclude that to become an RBI Governor, you do not necessarily have to be associated with any specific education or profession.
How to become an RBI Governor from RBI Grade B Officer
Yes, you can become an RBI Governer after working as an RBI Officer. There is a promotional structure at RBI after the RBI Grade B Officer that leads to the Governor position.
The promotional structure includes:
- Get into RBI as a Grade B Officer and work for 7 years.
- After that get promoted to the RBI Grade C position and again work for 7 years
- In the same league, one will get promoted to the RBI Grade D, Grade E and then Grade F position and work on every position for at least 5 to 7 years.
- After that, as per the policies and the performance, the Grade F officer will be promoted to the Deputy Governor position.
- After that one has to crack an interview organized by the Ministry of Finance for the position of RBI Governor, once you crack it you will get promoted to the position of an RBI Governor.
But here the twist is, only getting promotions does not completely make you eligible for the post of RBI Governor. While working in RBI, you have to get extra experience to become extra eligible for this post. You have to get experience in working at an international financial institution to make your candidature strengthened. But that can be achieved while being the RBI. Here are two major ways you can achieve that experience:
- Every year RBI sends some of its employees for International Depletion. RBI shortlists the employees on the basis of their experience and performance. Make sure you grab this opportunity. During the depletion process you will encounter the opportunity to work with some prestigious Financial Institutes such as IMF.
- Apart from that, RBI has this program of Silver Jubilee Scholarship for the employees to complete their higher studies abroad. By availing this scholarship and applying int he international Universities for Higher education, you can get exposure to the various International Financial Institutions like IMF, World Bank etc.
Facts about Some Famous RBI Governors
- M Narasimhan was the first RBI Grade B Officer who was appointed as an RBI Governor. He joined as an RBI Grade B Officer in 1950 and in 1977 he got promoted to the RBI Governor position. After the RBI Governor’s tenure, he worked as India’s Executive Director at IMF.
- Dr Raghuram Rajan has 4 years of experience as a Chief Economist at IMF before getting appointed as an RBI Governor.
- Dr Urjit Patel also worked at IMF for 5 years before his tenure at RBI as a Governor.
Conclusion
Becoming an RBI Governor requires a strong background in economics and finance, with significant experience in related fields. While there are no formal requirements, a strong performance record is essential. Promotion to an RBI position is the most common route, but additional experience such as working in an international financial institution can enhance eligibility. With dedication, knowledge and the right opportunities, aspiring individuals can aim for these top positions, contributing to the country’s economic prosperity and growth.