The government has started search for a new Reserve Bank of India (RBI) governor as the incumbent, D Subbarao, who battled inflation through tight money policy during his tenure, is set to exit in five weeks.
"The governor met me about 6 or 7 weeks ago... He (Subbarao) said that he would like to move on and he would not like to be considered for another extension. So I accepted that... That is where the conversation ended. We are now in a search-cum-selection mode of the new Governor," Finance Minister P Chidambaram told the media on Wednesday.
Subbarao, an IAS officer and finance ministry veteran, was appointed the 22nd Governor of the central bank in September 2008 for a three-year term. In August 2011, Prime Minister Manmohan Singh extended his tenure by two years.
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Tuesday's monetary policy announcements were most likely Subbarao's last major action. His term as RBI chief ends on September 4 while the next mid-quarter policy review is due on September 18.
It has been a roller-coaster ride for Subbarao who, in his five year tenure, battled the impact of global financial crisis, followed by high inflation, declining growth and now the weakening rupee.
He played a key role in steering the country out of the global financial meltdown following the fall of America's iconic investment banker Lehman Brothers in 2008. He also resisted the pressure from the government as well as the industry to reduce interest rates while according precedence to controlling inflation over promoting growth.
With his hawkish policy measures, Subbarao helped bring down inflation to below 5 per cent from the double digit level, while possibly sacrificing growth, which touched a decade low of 5 per cent in 2012-13.
Under his governorship, RBI had doubled the frequency of monetary policy reviews from every quarter to eight times a year with a view to bring down the need for off-cycle rate moves.