All About The RBI Governor
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Recently, Sanjay Malhotra has been appointed the Governor of RBI on December 11, 2024. Shaktikanta Das, the 25th governor of the Reserve Bank of India, stepped down after six years in office.
The Reserve Bank of India (RBI) is the highest banking authority in India. Since its establishment in 1935 by the British colonial government, many have worked on the post of the Governor of the Reserve Bank of India. The Governor of the Reserve Bank of India is the Chief Executive Officer of the Central Bank of India and the ex-officio Chairman of its Central Board of Directors. The Indian note issued by the Reserve Bank of India (RBI) bears the signature of the Governor of the Reserve Bank of India. The RBI Governor is appointed by the government of India for a 3-year term and can be re-elected for the position.
Below is a snapshot of some notable RBI Governors and their legacies:
Names are proposed by the Finance Ministry and finalized by the Appointments Committee of the Cabinet. While their monthly salary (around ₹2.5 lakh) might not scream “luxury,” the perks and the prestige more than make up for it. Governors shoulder critical responsibilities, from crafting monetary policies to regulating banks and steering the economy through storms like recessions and pandemics.
Tenure: The term of office of an RBI governor is currently 3 years (previously it was 5 years). However, the term can any time be increased by the government
Deputy RBI Governor:
Deputy governor of RBI is an immediate superior to governor of RBI.
Malhotra’s Responsibilities:
As he steps into this pivotal role, Malhotra faces significant challenges. The Indian economy is currently experiencing a slowdown, with growth rates dropping to a seven-quarter low of 5.4% during the July-September period. There is increasing pressure on the RBI to consider interest rate cuts to stimulate economic activity. Under his predecessor, Shaktikanta Das, the RBI maintained steady interest rates for nearly two years amid inflation concerns. Malhotra's appointment reflects a broader trend within the Indian government favouring experienced bureaucrats for key economic positions. His first major task will be to chair the monetary policy committee's meeting in February 2025, where critical decisions regarding interest rates will be made.
Fun facts-
The person who served as the RBI Governor for the longest time period was Benegal Rama Rao. He worked for 7 years from 1st July 1949 to 14th January 1957.
Amitabh Ghosh served RBI as Governor for the shortest time, only for 20 days starting from January 15, 1985, to February 4, 1985.
Manmohan Singh is the only RBI Governor, who also served the country as the Indian Prime Minister
The first Indian Governor of RBI was Mr. C.D. Deshmukh
Ms. KJ Udeshi was the first woman Deputy Governor of the Reserve bank of India. Her tenure started from June 10, 2003, and lasted for over 2 years, till October 12, 2005.