.........“An interim COO cannot happen as the law does not allow this. The (RBI) Act has to be amended first. There is no ambiguity on that,” said G S Sandhu, secretary, financial services. “We have not got any proposal so far (from RBI on a COO). Once the proposal comes, we will have to address the issue.”.......
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gWith due respect to the views expressed by Secretary Financial Services on creation of new post of COO, it may be pointed out that the Central Board and Governor of the Bank are not powerless to do do. On true and correct interpretation of the provisions of Sect 7 of the RBI Act, 1934 read with the full bench decision of the Apex Court in V. T. Khanzode v. RBI (AIR 1982 SC 917), it would be permissible to create a post of COO on terms and conditions as may be decided by the Board. The COO can be contractual appointee and also be given a benefits/status of Dy. Governor at par with Dy. Governors
appointed under the current provisions of the RBI Act. Needless to say, statutory appointees being not more than four can be increased to five/six by amending RBI Act, as and when comprehensive review of the Act is taken up. To read a prohibition on powers of the Board would be contrary to what the Apex Court has stated in its aforesaid judgement.
M. A. Batki
Former Legal Adviser RBI.
mabatki@hotmail.com
mabatki@gmail.com
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