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One of the tallest buildings in downtown Mumbai's financial district is the imposing 25-storeyed headquarters of the country's central bank and apex monetary authority. The higher one moves up the hierarchy in the RBI the more rarefied the atmosphere gets. Especially if one belongs to a northeastern state like Assam or, worse, a scheduled caste. This realisation came the hard way for the seniormost executive director of the RBI, R.B. Barman, who was first promoted as deputy governor last November and then demoted to his previous rank a few weeks later. Sources contend that one of the reasons why he was sidelined may be because of his scheduled caste background.

After Barman's demotion, the Union minister for heavy industries and public enterprises and Lok Sabha MP from Silchar, Assam, Santosh Mohan Deb, wrote a letter to the PM complaining that the RBI's executive director has been badly treated. Other MPs too have made similar representations to Manmohan Singh who, ironically, has been elected to the Rajya Sabha from Assam. The bigger irony is that this episode has happened in an era when the UPA government is shouting from the rooftops about the need to improve the conditions of the socially under-privileged. It's trying to increase reservations in elite institutions like the IITs and the IIMs, and Manmohan himself has initiated a debate about the need to introduce job reservations in the private sector.

Unfortunately, the central bank itself has ill-treated Barman, a scheduled caste, in the past few years. Barman joined the RBI 26 years ago and rose through the ranks to become executive director in November 2000. Thereafter, in July '03 and again in September '04, those junior to him were promoted to positions of deputy governor—such individuals include Shyamala Gopinath, K.J. Udeshi and Usha Thorat. On these occasions, Barman did not make any official complaint.

Then came the most humiliating experience. On November 17, at a meeting of a committee of the RBI's central board, Barman was finally elevated to the post of a deputy governor. According to para 1.2 of the meeting's minutes, the "Governor announced the elevation of Dr R.B. Barman, Executive Director, as Deputy Governor in his personal capacity, in recognition of his expertise and contributions in his area of specialisation."

Deputy governor V. Leeladhar issued an office order later the same day stating that Barman "has been given the status equivalent to that of Deputy Governor...till he attains the age of superannuation (i.e. till July 31, 2008) purely on personal basis". The order added that he would draw pay and allowances and be entitled to all facilities given to all deputy governors of the RBI. On December 2, Grace Koshy, chief general manager and secretary, issued a formal letter confirming Barman's re-designation. This was widely circulated within the RBI and became well known in financial circles.

However, on December 9, Koshy issued a "partial modification" of her earlier letter "advising" that whereas Barman had been given a status equivalent to that of deputy governor and was entitled to the remuneration and facilities given to all deputy governors of the RBI, "Dr Barman would continue to be designated as Executive Director". Barman and many others in financial circles saw the move as evidence of cavalier treatment of a scheduled caste person who had already been repeatedly superseded.

It also shocked Barman, who took some time to figure out what had happened. He certainly felt he did not deserve such treatment from an organisation he had served faithfully since August 1979 when he was appointed deputy director.

After his demotion, on December 22, Barman wrote to RBI governor Y. V. Reddy complaining that while the minutes of the November 17 meeting of the RBI central board's committee and that day's office order had cleared his appointment, the subsequent decision to withdraw his designation had "caused me great humiliation and embarrassment, undermining my dignity, position and authority" and was an act of "great injustice". In the same letter, Barman asked Reddy to spell out the "legal and operational constraints" that prevented his elevation to the post of deputy governor although several others who were junior to him had been promoted. Four months after he wrote that letter, Barman is yet to receive a formal reply. When Outlook contacted Reddy, he refused to comment.

The obvious question that arises: why was Barman treated so shabbily? One view is that he was not adept at "political manoeuvering, lobbying and promoting himself"—at least until he was publicly humiliated—and this led to his being sidelined. Another contention is that he was ignored because there was no precedent for a statistician to rise to the position of deputy governor.

A third charitable one is that the RBI made a genuine mistake. Finally, sources close to Barman claim that he was a victim of RBI's inner politics.

In retrospect, it appears that Reddy elevated Barman "in his personal capacity" without following the proper appointment procedure. The process of appointing a deputy governor begins with the governor recommending the person's name. This is initially processed by the banking department in the ministry of finance, then approved by the finance minister and finally, by the appointments committee of the cabinet. Even the RBI spokesperson admitted that "the appointment of a deputy governor can be made formally only by the government of India." But, none of these steps were followed in Barman's case. However, Barman, in his December letter to the RBI governor, insisted that Reddy had told the committee of the RBI's central board on November 17 that the latter "had taken up the matter with the ministry of finance and had received government's concurrence to this proposal".

A senior official of the RBI mentioned there was a "small technical and administrative issue" in designating Barman as deputy governor. And the central bank's spokesperson clarified that the "sanctioned strength of deputy governors in RBI (as per the RBI Act, 1934) is only four. We, therefore, had to suo motu drop the designation given to Dr Barman (who happened to be the fifth one). While we had to regrettably do this, we retained the status and all the benefits given to Dr Barman. This was explained to Dr Barman in person by the deputy governor in charge of the department to which Dr Barman belongs before we withdrew (his promotion)." But how did RBI officials forget such an important clause in the RBI Act? "That was a mistake," acknowledged the official.

In the same vein, the RBI admits there's nothing wrong with Barman's credentials. He holds charge of three important departments: statistical analysis and computer services, information technology and payment and settlement systems. RBI sources also accept that he has made important contributions in modernising and improving information systems and transaction processing. Barman was in the forefront of various successful projects, including those for data warehousing, real-time payments and settlements and cheque truncation. The RBI source quoted earlier said Barman was regarded highly by his colleagues. "He is a popular person and has often been called to speak at prestigious seminars and conferences in the country and abroad."

Despite such achievements, the RBI has missed out on an opportunity to promote Barman who could have been its first scheduled caste deputy governor.

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