Reserve Bank hires outside talent to boost market nous

Since taking the helm in late 2013, RBI Governor Raghuram Rajan has set out to bring fresh ideas to the conservative institution and has eyed recruiting more specialists from outside, but they have been few and far between.

In late 2014, Rajan, who has lamented a dearth of capable economists in India, brought in former IMF economist Prachi Mishra to bolster economic research.

Senior officers at the central bank typically rise through the ranks having joined at a junior level. Some are seconded to foreign central banks to gather more specialist experience.

The new hire, Gangadhar Darbha, joined as a consultant at the start of this month, officials with direct knowledge said.

The description for his job, given in an advertisement posted by the RBI, said it carried responsibility for developing and improving derivatives markets and examining currency futures, interest rate futures and offshore non deliverable markets.

"The RBI strongly believes such new markets, new products will help in monetary policy transmission," said one official with knowledge of the RBI's thinking.

A second official hailed the benefits of hiring externally.

"Product development requires exposure to and experience in the global market. Such external hires will help add value to the RBI," the official said.

Rajan has a keen interest in market products. Under him, the RBI took external feedback last year to revise rules governing bond futures trading, and make the market succeed at the third attempt.

While futures have been well received, markets for other products like credit default swaps remain difficult.

According to officials, Rajan wants to bring more consultants into a central bank, where hiring outsiders, even on short-term contracts, is still fairly rare.

S.S. Mundra, the RBI's deputy governor in charge of human resources, said the move to bring in outside expertise was not entirely new and remained limited.

"Occasionally, we have been doing it. It is just an extension of that policy," Mundra said.

Darbha declined to comment on his appointment.

Additional reporting by Devidutta Tripathy