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For the first time, panel to draw list of potential RBI Governor candidates

The move is being made to allay speculations that the government will pick Raghuram Rajan for the second term.

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In a shift from tradition, a panel of finance experts will come up with a list of names for the Reserve Bank of India Governor candidacy. The recommendations will be passed onto the government, who will take the final call, a report from The Times of India has said. 

So far, the decision of the RBI governor's post has been made by the prime minister and finance minister. The current move has been made to allay speculations that Raghuram Rajan may be considered for a second term.

For this, the financial sector regulatory appointment search committee (FSRASC) will draw up a list of potential candidates and hand their recommendations over to the government. The FSRASC is responsible for appointing heads of various industry regulators including Sebi, insurance regulators, pension, and so on. 

It's important, however, to note that last year, the FSRASC had interviewed several candidates for the post of the Sebi chief, however, the government went against its recommendations and re-appointed U K Sinha for one year, the report says. 

The FSRASC panel includes the cabinet secretary, additional principal secretary to prime minister, P K Mishra and three outside experts -- Rajiv Kumar (Centre for Policy Research), Manoj Panda (Institute of Economic Growth) and Bimal N Patel (Gujarat National Law University). Apart from this, a finance 

A finance ministry representative will be a special invitee. The panel's recommendation will be finally sent to the appointments committee of cabinet headed by the PM, which will decide on the governor.

The report says that the panel's process will be in sync with the government that said selecting the RBI governor will be an "administrative decision" taken close to September when Rajan's term comes to an end. 

The shift in strategy to pick the next Governor is to ensure that political influence in the decision is minimum. While the final power still lies with the government, having a panel make a short list of candidates against the government picking one name in the past, is also seen as a move to limit the government's discretion in the matter and will pit all regulatory bodies at the same level 

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