The Reserve Bank of India Governor, Dr D. Subbarao, has got a two-year extension. He will continue to hold office till 2013.

“The Prime Minister has approved the extension of the term of Dr D. Subbarao as Governor of the Reserve Bank of India for a further period of two years with effect from September 5, 2011 up to September 4, 2013," said a statement today from the Prime Minister Office.

This move is meant to give an impression of stability to the economy, sources told Business Line . Secondly with the current global economic situation, bringing a new person at the helm would not have been a wise step, they said, adding that with this intention, the Government has given extension to Dr Subbarao.

The Government has been maintaining that the term of regulators has been revised from three years to five years. But, the immediate past SEBI chairman, Mr C.B. Bhave, was not given extension once he completed three years. Even Mr Bhave’s successor, Mr U.K. Sinha, has also been given a three-year term.

However, with this extension Dr Subbarao will now have a full five-year term.

Under his governorship, the RBI recently doubled the frequency of monetary policy reviews from every quarter to eight times a year with a view to decrease the need for off-cycle rate moves.

Dr Subbarao had earlier served under Dr Manmohan Singh in the Finance Ministry as a senior official in the early 1990s, when the latter was Finance Minister. He was the Finance Secretary before becoming the 22nd Governor of the RBI.

Dr Subbarao, who has headed RBI since 2008, steered the country through the economic crisis. He is credited with taking a tough monetary stance to check inflation.

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