The next Reserve Bank of India Governor will be appointed based on recommendations from the Financial Sector Regulatory Appointment Search Committee, reported The Times of India. The Union government decided that this panel, which was formed two years ago to look for heads of Securities and Exchange Board of India and Life Insurance Corporation, will now also shortlist candidates for the post of RBI governor.

Cabinet Secretary PK Sinha will head the committee. Apart from him, the panel includes Additional Principal Secretary to the Prime Minister PK Mishra, who is a permanent government nominee, and three other experts – Rajiv Kumar of Centre for Policy Research, Manoj Panda of the Institute of Economic Growth and Bimal N Patel from Gujarat National Law University. A finance ministry representative will be a special invitee to the panel.

The panel's recommendation will be sent to the Appointments Committee of Cabinet that is headed by the prime minister. This committee will take the final call in September when current RBI Governor Raghuram Rajan completes his tenure.

This move comes at a time when speculations are rife that Rajan may continue for a second term, and after political leaders have questioned his credibility as the apex bank's governor.