The board of the Reserve Bank of India (RBI) met on Thursday and probably, for the first time, it was not the finance secretary, who represented the government as a nominee but a more junior officer.
In place of Rajiv Mehrishi, additional secretary Ajay Tyagi was present at the meeting on Thursday. The RBI, on its board, has 17 members of which two are nominated by the government. The two government nominees have been traditionally the economic affairs secretary and the secretary of department of financial services.
While Meherishi is set to retire soon, the government’s notification indicated Tyagi’s appointment as a nominee. The central bank’s release on Thursday, on the board meeting, also indicated Tyagi as the “government nominee director.”
The RBI’s 17 board members also include eminent personalities from various walks of life such as nuclear scientist Anil Kakodkar, industrialists Y C Deveshwar and G M Rao, social activist Ela Bhatt besides prominent academicians such as Dipankar Gupta and Damodhar Acharya among others.
Under section 8 of the RBI Act 1934, the government appoints all the directors of the board including the governor and the deputy governors of the RBI. Directors are appointed for a tenure of four years and can serve two terms continuously or intermittently. Y H Malegam has the longest tenure on the RBI board.
Deputy governors and two government nominated directors are ex-official members of the board and do not get to vote. The government can nominate two directors and typically they are the secretaries of the department of financial services and economic affairs.
During Thursday’s meet, the agenda included finalising the annual report of 2014-15 as well as the transfer of surplus from the central bank to the government.