The Central government has approved the appointment of Swaminathan Gurumurthy, as a part-time non-official director on the Central Board of the Reserve Bank of India (RBI). The appointment has sparked a controversy due to his strong political leanings towards Rashtriya Swayamsevak Sangh (RSS).
A government notification on late Tuesday evening said, "The Appointments Committee of The Cabinet has approved the proposal of the Department of Financial Services for the appointment of Shri Swaminathan Gurumurthy, as part-time non-official director on the Central Board of the Reserve Bank of India under Section 8(1)(c) of the RBI Act 1934, for a period of four years from the date of notification of the appointment".
Apart from Gurumurthy, Satish Marathe, a veteran in the co-operative and rural banking has also been appointed on the RBI board as a part-time non-official director.
Gurumuthy is an economist by profession, a chartered accountant, and a commentator on political and economic affairs. He is associated with the right-wing Rashtriya Swayamsevak Sangh since his college days and is the convener of the Swadeshi Jagaran Manch. He has been an ardent supporter of the incumbent BJP government at centre and Prime Minister Narendra Modi.
Gurumurthy hailed the demonetisation decision taken by the Modi government and termed it as "a fundamental corrective to the economy much like liberalisation of the 1990s." He has been a critic of RBI's step to direct the banks to increase the provisioning and questioned its move to follow the Basel Capital Adequacy Ratio (CAR) norms.
The second appointee, Satish Marathe has a rich experience in the rural and co-operative banking sector. Marathe was associated with the Akhil Bharatiya Vidyarthi Parishad, which is the student body of the RSS where he served as its treasurer for a span of four years.
The RBI central board consists of official and non-official directors where the official directors include the governor and not more than four deputy governors. The RBI Act empowers the central government to nominate ten directors that include experts from various fields and two government officials.
This is the first time that a person with a strong political lineage has been nominated on board as the past nomination has been made purely on the qualification basis. Although Gurumurthy has the desired qualification, his political inclination raises questions.
