Mumbai: Financial Services Secretary G S Sandhu on Wednesday said the Finance Ministry has not received any proposal from the Reserve Bank for appointing a Chief Operating Officer on the rank of a Deputy Governor and that the RBI Act has to be amended to facilitate any such opening.
"We have not got any proposal so far (from the RBI on appointing a COO). Once the proposal comes then definitely we will have to address the issue," Sandhu said speaking to reporters on the sidelines of a banking conclave here.
The comments come after the Reserve Bank on August 14 had issued a statement, proposing to appoint a COO in the rank of a Deputy Governor.
The RBI had said its Board had earlier in the month approved HR restructuring by creating an additional post of Chief Operating Officer in the rank of a Deputy Governor and would approach the government for required legislative changes.
"One of the proposals envisaged is the creation of an additional position of a COO of the rank of a Deputy Governor to head one of the five functional clusters. The proposals were discussed in the Reserve Bank's Board meeting. The Board approved the broad contours of the proposals," RBI had said in a statement.
The statement further said the Board had advised the RBI to operationalise the restructuring and asked it to "initiate a dialogue with the government on the additional post of Deputy Governor and the legislative changes that will be needed."
But on the same day, Sandhu had said the proposal would be discussed with the Finance Minister once the RBI sent the proposal.
"The RBI is also re-organising internally. After that if they think that there is requirement of COO, then they will send proposal and the finance ministry would take a view. The appointment of Deputy Governors is done by the Appointments Committee of Cabinet.
"As per the present norm, the RBI can have four Deputy Governors. If the fifth Deputy Governor has to be appointed, then the Act has to be amended," Sandhu had said on August 14.
Also, Sandhu today reiterated that the appointment of a COO can be done only after amending the RBI Act, which does not provide for any such post now.
"The RBI Act has to be amended first. Interim appointment is also not possible. There is no ambiguity, the Act has to be amended," Sandhu said today.
The Secretary said the government is also working on a slew of other reform initiatives at the state-run lenders on various fronts, including governance issues, the separation of the post of chairman and managing director, longer tenure for top management and quality of nominee directors and independent directors.
It can be noted that the RBI is headed by the Governor and assisted by four deputy governors looking after different functions.
The restructuring proposals and the grouping of departments into five functional clusters have been widely discussed at various levels in the Reserve Bank.
The Board proposals involve professionalisation of HR functions in RBI, including a more effective performance management system and responsive and proactive skill and leadership development programmes, it added.
Accoording to reports, the COO proposal has met with opposition from the within the central bank staff, who are highly unionised as well and the Governor Rajan has met with union leaders to regarding the same.
