My View on "Interim COO at RBI not possible: FinMin":
With 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.
3 comments:
The objective is to create a post by name "Chief Operations Officer', the same could be done in the manner suggested by Mr. Batki. However, here the objective is to appoint 'COO" and to place him above other Deputy Governors. Using the option suggested by Mr. Batki for his purpose is not a responsible way of doing.
Why not one of the 4 DGs can be redesignated as COO and his existing portfolio can be redistributed among the other 3 DGs? Are the DGs so overburdend that they cannot take on some additional responsibilities and thereby save the botheration and consequent delay in creation of another post of DG?
Legalities apart, if the felt need is ‘to have a fifth Deputy Governor’ to share responsibilities, as finance ministry suggested, the procedures could be followed and the objective can be achieved. After all, there were times when only two DGs were in position. If the purpose is to make one person responsible to ‘coordinate’ four DGs’ work, perhaps that job cannot be delegated beyond a point and Governor will have to continue to do it with ‘secretariat support’. Cutting and pasting concepts like ‘COO’ from companies or central banks elsewhere will add to problems.
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