In News:

Recently, the Government of India announced the appointment of Sanjay Malhotra as the 26th Governor of the Reserve Bank of India (RBI). He replaces Shaktikanta Das, whose six-year tenure ends on December 10, 2024.

Background of Sanjay Malhotra:

• Education & Early Career: Sanjay Malhotra is a 1990-batch IAS officer from the Rajasthan cadre. He holds a degree in Computer Science Engineering from the Indian Institute of Technology (IIT) Kanpur and a Master’s in Public Policy from Princeton University.
• Professional Experience: Malhotra has over 33 years of experience in various sectors including power, finance, taxation, information technology, and mines. He is currently serving as the Revenue Secretary in the Ministry of Finance, a position he has held since October 2022. Prior to this, he was Secretary of the Department of Financial Services.
• Monetary Policy and Challenges: As RBI Governor, Malhotra will inherit the responsibility of steering India's monetary policy, especially as inflation has been a persistent issue and economic growth has slowed. His first monetary policy review is expected in February 2025.

About the Appointment Process:

RBI Governors are appointed by the Government of India, and the appointment process involves the Financial Sector Regulatory Appointment Search Committee, which includes the Cabinet Secretary, the current RBI Governor, the Financial Services Secretary, and two independent members. The committee prepares a list of eligible candidates, interviews them, and the final decision is made by the Cabinet Committee on Appointments, chaired by the Prime Minister.

RBI Governors Eligibility Criteria

• The RBI Act, 1934 does not mention any specific qualification for the governor. People with different educational backgrounds were selected to head the institution. However, the governor traditionally is either a civil services personnel or an economist.
• Candidates should have prior experience in areas such as:

• Working with the International Monetary Fund (IMF) or World Bank.
• Serving as Chairman or General Manager of a bank.
• Holding significant positions in reputable financial or banking organizations.
• Working in the Ministry of Finance of the Government of India.
• The candidate must be an Indian citizen aged 35 years or older.
• The candidate cannot be a member of Parliament, State Legislature, or hold any other office for profit

Key Responsibilities of the RBI Governor:

• Monetary Policy: The RBI Governor chairs the Monetary Policy Committee (MPC), which is responsible for setting benchmark interest rates and managing inflation.
• Regulation of Financial Institutions: The Governor oversees the regulation of banks, non-banking financial companies (NBFCs), and other financial institutions.
• Currency Management: The Governor ensures the proper issuance of currency and the withdrawal of unfit notes.
• Crisis Management and Policy Execution: The Governor is pivotal in managing financial crises and ensuring the execution of policies related to foreign exchange and financial inclusion.