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Raghuram Rajan says three-year term is short for RBI Governor

raghuram-rajan-speechOutgoing Reserve Bank of India (RBI) Governor Raghuram Rajan has said that the central bank chief should have a tenure of four years.

He said this while responding to the queries of parliamentary committee, sources privy to the development said.

Rajan reportedly said that the said the tenure of the RBI Governor is “short”, citing the longer tenures offered to counterparts across the world.

It is learnt that Rajan decided not to seek another term because of government’s late defence of the Governor against persistent scathing attacks by the Bharatiya Janata Party’s Rajya Sabha MP Subramanian Swamy.

Sources further said that after being asked about his opinion was about the tenure of the RBI Governor, Rajan replied that it was short and should be four to five years like his counterparts are having globally.

He also said that in the US, the tenure (of the head of the US Federal Reserve) is of four years while in some other countries it is five years. “It is for the government to take a call on what should be the ideal tenure of RBI Governor,” said sources quoting Rajan.

RBI Governor’s remark came a little under two weeks after he announced that he will be demitting office at the end of his three-year term in September and returning to academics.

RBI refused to comment on the governor’s remarks at Thursday’s hearings.

In June, in a letter to RBI staff that was put up on the central bank’s website, Rajan noted that a monetary policy committee that will set interest rates was yet to be formed and a bank clean-up was still under way.

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