How is the RBI Governor appointed?

Sub: Eco

Sec: Monetary Policy

Context:

Sanjay Malhotra, a 1990 Batch Rajasthan Cadre IAS Officer, has been appointed as the 26th Governor of the RBI. He will assume office for a period of three years.
He will be the 26th Governor of RBI and will replace the current Governor Shaktikanta Das.

Who appoints RBI Governor:

The Governor of the Reserve Bank of India is appointed under the provisions of Section 8 of the RBI Act, 1934. The Central Government is responsible for appointing the RBI Governor.

Appointment process:

The Financial Sector Regulatory Appointment Search Committee (FSRASC) is tasked with preparing a list of eligible candidates.
Members of the FSRASC include:
- The Cabinet Secretary
- The current RBI Governor
- The Financial Services Secretary
- Two independent members
After this, the selected candidates are interviewed and their names are sent to the Appointment Committee of the Cabinet, which is headed by the Prime Minister.
The committee selects the governor through confirmation of the appointment.

Tenure:

The governor holds office for periods not exceeding five years. The term of the governor may be fixed by the government at the time of his appointment. The governor is eligible for reappointment or extension.

Qualifications:

The RBI Act, 1934 does not mention any specific qualification for the governor.
However, the governor traditionally is either civil services personnel or economists.