Markets: Eerie calm

Markets: Eerie calm

it is not clear when market sentiment can change; as in the past, it can be quite sudden.
At a turn and yet not

At a turn and yet not

RBI could be tempted to cut policy rate to support growth at its bi-monthly review.

RBI Dy Governor K C Chakrabarty resigns abruptly before end of term

Mar 21 2014, 10:13 IST
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RBI deputy governor Kamalesh Chakrabarty, whose 5-year tenure was to end on June 15, 2014, will serve a one-month notice period. RBI deputy governor Kamalesh Chakrabarty, whose 5-year tenure was to end on June 15, 2014, will serve a one-month notice period.
SummaryRBI deputy governor Kamalesh Chakrabarty has put in his papers, less than 2 months ahead of his retirement.

Reserve Bank of India deputy governor Dr Kamalesh Chandra Chakrabarty has put in his papers, less than two months ahead of his retirement.

Chakrabarty, whose five-year tenure was to end on June 15, 2014, will serve a one-month notice period, said a senior RBI official. “He mentioned that he’s resigning on personal reasons. He hasn’t given any specific reasons for the resignation,” said a senior RBI official. Chakrabarty’s sudden move, that too just ahead of the next RBI monetary policy, has taken the banking fraternity by surprise.

He is the first RBI top official to quit before retirement in the last two decades. With Chakrabarty moving out, two posts of deputy governor will fall vacant as the government has not yet brought in any replacement for Anand Sinha, who retired two months ago.

Chakrabarty was appointed as RBI deputy governor for a three-year term on June 15, 2009, and was subsequently given a two-year extension. Known for his candid and outspoken views, Chakrabarty had earlier run into trouble during the tenure of D Subbarao as RBI governor and was stripped of some of his responsibilities for stating that the RBI was not doing enough to control inflation. He, subsequently, got back the portfolios that had been divested.

“He had indicated to his friends that he wanted to take up an assignment abroad as his family is based in the UK. He has got a good offer from London and he wants to take up this offer immediately,” said an RBI source.

A search panel had recently called five PSU bankers, including Punjab National Bank chairman KR Kamath, Bank of India chief VR Iyer and Indian Overseas Bank chairman M Narendra, for interviews to identify Chakrabarty’s successor. His assignments at the RBI included guiding and overseeing the areas pertaining to supervision of banks, currency management, payments and systems, financial stability, customer service, rural credit and human resource management.

Chakrabarty had a long career in banking before moving to the RBI. After working in Bank of Baroda for 26 years, he was posted as chief executive of BoB’s UK operations between 2001 and 2004 before being elevated as executive director of Punjab National Bank in 2004. Chakrabarty, who holds a doctorate in statistics, held the posts of chairman and managing director of Indian Bank and Punjab National Bank and chairman, Indian Banks’ Association before taking charge as the RBI deputy governor.

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