RBI Governor Subbarao gets 2-year extension

Subbarao

The government gave a two-year extension to Reserve Bank Governor D Subbarao to ensure continuity of India's monetary policy at a time when the whole world is reeling under the fallout of the downgrade of the sovereign rating of the US.

"It (extension) will be good because at this point of time, extension of the RBI Governor is needed. Though there was time till September, we decided (that) we should do it quickly to ensure that there is no uncertainty," Finance Minister Pranab Mukherjee told reporters after announcement of Subbarao's extension as head of the country's monetary authority.

Subbarao, who has 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 September, 2008, will continue as RBI chief till September 5, 2013.

"He (Subbarao) is doing good job and he has already earned his reputation as central bank Governor in the various deliberations of the G-20, where Finance Ministers and central bank governors meet and take decisions," Mukherjee said.

Subbarao was to retire in September following the completion of a three-year term. "The Prime Minister approved the extension to D Subbarao, Governor of RBI, for two years," a PMO spokesman said.

The 61-year-old former IAS officer and veteran Finance Ministry official was appointed the 22nd Governor of the central bank in September, 2008.

The continuation of Subbarao at the helm of the RBI assumes significance as it comes at a time when the government and the central bank are gearing up to meet the challenge posed by the economic crisis in several eurozone nations and the downgrade of the US sovereign rating to AA+ from AAA by Standard and Poor's.

The downgrade triggered a steep fall in stock markets throughout the world, including the BSE and NSE in India.

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