Balakrishnan, a chartered accountant, was till recently vice president with the National Securities Depository Ltd (NSDL), India’s first and largest depository, before joining RBI. She will be the 12th executive director of the RBI, and will have a three year term.
RBI did not reply to an email seeking comment.
At the RBI, Balakrishnan will be in charge of the central bank’s balance sheet to ensure accounting policies and procedures comply with regulations.
A recruitment notice issued in October 2017 said the new CFO will also be responsible for communicating an accurate and timely reporting of the central bank’s financial performance and oversee its budgetary processes.
Besides internal accounts and budget, the CFO will also be in charge of corporate strategy functions like deciding the provident fund rate, which the central bank manages for its employees.
But more importantly, Balakrishnan will be in charge of the government and bank account department, which processes government transactions like payments and revenue collections such as taxes. As the nodal officer managing the RBI balance sheet, Balakrishnan will also oversee the central bank’s investments in India and abroad.
The idea to have a dedicated officer handling the internal financial functions of the RBI was first floated during Raghuram Rajan’s term as RBI governor. Rajan had proposed creating a post of chief operating officer (COO) at the rank of a deputy governor but that proposal was not accepted by the government.
After Patel took over as RBI governor, it was decided in consultation with the government to have a CFO position at the rank of an executive director.
“The job profile that Balakrishnan has got is more than what was advertised,” said a former senior executive from the RBI. “As CFO she will be privy to a lot of sensitive information of the RBI, including the foreign investments.
Given that this post is a contractual one, with the first term lasting just three years, there is an inherent risk in this job profile. Having said that it is a new experiment and one needs to see how it evolves.”
So far the central bank’s balance sheet was managed internally and there was no dedicated officer to do the job. This post is likely to free up some functions at the top management level of the central bank.
RBI has been searching for a CFO since May 2017 when it first advertised for this post.
However, an executive from a foreign bank who was selected declined to join because of differences regarding remuneration.
RBI again advertised for the post in October 2017 and after a long winding process finally selected Balakrishnan.