The Reserve Bank of India (RBI) Deputy Governor, T. Rabi Shankar, has been appointed as a part-time member of the 15th Finance Commission by the central government. This appointment follows the resignation of the full-time member and former Finance Secretary, Ajay Narayan Jha, due to personal reasons.
New Delhi: The Union Ministry of Finance recently appointed T. Rabi Shankar, Deputy Governor of the Reserve Bank of India (RBI), as a part-time member of the 16th Finance Commission. This appointment comes after Ajay Narayan Jha, former Finance Secretary and a full-time member of the 16th Finance Commission, resigned due to personal reasons. Shankar will assume his new role from May 3, 2025, and will serve until the commission submits its report or October 31, 2025, whichever is earlier.
16th Finance Commission: Role and Significance
The 16th Finance Commission was constituted on December 31, 2023, and is headed by former NITI Aayog Vice Chairman Arvind Panagariya. The commission advises on the distribution of funds between the central government and the states. It also formulates recommendations for budgetary and financial planning. The commission is expected to submit its report by October 31, 2025, for implementation from April 1, 2026.
The Finance Commission's importance lies in its role in balancing center-state financial relations and ensuring a fair share of financial resources for states. For instance, the 15th Finance Commission recommended allocating 41 percent of the central divisible tax pool to the states.
T. Rabi Shankar: Extensive RBI Experience
T. Rabi Shankar first became RBI Deputy Governor in April 2021. His initial three-year term was extended by a year in May 2024. His second term commenced on May 3rd. He heads key RBI departments, including currency management, external investments, foreign exchange operations, and financial market regulation.
Significantly, he has played a crucial role in the development of the Central Bank Digital Currency (CBDC), considered a revolutionary step in India's financial technology. In January 2025, he also received additional charge of the Fintech Department, which plays a central role in promoting digital and technological innovation.
Professional Background and Achievements
T. Rabi Shankar began his service at the RBI in 1990. His career has primarily focused on payment systems, IT, risk management, and financial stability. He has held several senior positions within the RBI, including significant responsibilities as an Executive Director. From 2005 to 2011, he also served as an advisor to the International Monetary Fund (IMF).
There, he worked on projects related to government bond markets and debt management. Additionally, he has served as the chairman of the Indian Financial Technology and Allied Services (IFTAS), which develops technological solutions for financial service providers.
Education and Expertise
T. Rabi Shankar holds an M.Phil in Economics from Jawaharlal Nehru University. His education and experience make him a highly influential expert in India's monetary policies and financial management. His contributions have not only strengthened RBI policies but also propelled the digitization and innovation of the financial system.
His Role in the 16th Finance Commission
As a part-time member of the 16th Finance Commission, T. Rabi Shankar's role will be highly significant. His experience as RBI Deputy Governor, coupled with his understanding of monetary policy and financial stability, will add considerable weight to the commission's decisions. His expert opinion on the equitable distribution of financial resources and maintaining the financial balance of states will be invaluable to the commission.
His appointment will aid the commission in formulating policy recommendations that consider financial regulation, market trends, and technological advancements. This will contribute to India's economic growth and better management of center-state financial relations.
