Formal announcement likely in next 48 hours.
The Modi government may appoint Vice Chairman of Niti Aayog Arvind Panagariya as the new RBI governor, as per media reports. A formal announcement is expected in the next 48 hours.
According to an Indian Express report, the PM's office has confirmed that a decision will be taken before July 18. Modi's key policy advisor, Panagariya is also India's Group of 20 summit negotiator.
The current RBI Governor Raguram Rajan's tenure will end on September 4. The rockstar banker has already announced that he will be returning to academia and will not be seeking a second term.
Indian-American economist Panagariya is a close associate of economist Jagdish Bhagwati. Panagariya has worked as chief economist of Asian Development Bank and has worked in eminent organisations like World Bank, WTO etc in various capacities. He holds a PhD degree from Princeton University.
He was appointed Vice Chairman of Niti Aayog in January 2015. The Modi government formed the Niti Aayog after the Planning Commission was abolished.
Earlier reports had named former deputy governors of the Reserve Bank of India Subir Gokarn and Rakesh Mohan as top contenders for the post. Others who were said to be in the fray for job included SBI chief Arundhati Bhattacharya and Economic Affairs Secretary Shaktikanta Das.
Traditionally, the Prime Minister picks the RBI Governor after consultation with the finance minister. The same process is likely to be followed this time around with Modi choosing Rajan's successor after consulting Arun Jaitley. Sources said once a new governor is named, he will become an Officer on Special Duty (OSD) in the central bank to allow a smooth transition.
Rajan, who will have the shortest tenure as RBI Governor since liberalisation began in 1991, decided not to seek a second term after unbridled political attacks on him led by BJP MP Subramanian Swamy.
All RBI Governors in the past 23 years have got a second term - from Dr C Rangarajan (1992-97), Bimal Jalan (1997-03), YV Reddy (2003-08) to D Subbarao (2003-08). Rajan will break that chain.
With PTI inputs
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