In a major administrative move, T Rabi Sankar, the Reserve Bank of India's (RBI) deputy governor, was named a part-time member of the 16th Finance Commission by the President of India. He takes over for Ajay Narayan Jha, who resigned from his post ffor personal reasons. Sankar will remain in office until the commission's report is turned in or until October 31, 2025, whichever comes first.
The appointment of T Rabi Sankar to the 16th Finance Commission coincides with an important stage in the Commission's preparation of its fiscal recommendations for the years 2026–2031. It is anticipated that his knowledge of central banking and financial markets would have a big impact on the structure of the financial connection between the Center and the State.
Who is T. Rabi Sankar?
T Rabi Sankar was reappointed by the national government in April as the Reserve Bank of India (RBI) Deputy Governor for a second term, which took effect on May 3. He was initially appointed in May 2021 for a three-year term, then in May 2024, he was granted a one-year extension.
Rabi Sankar is now in charge of 13 RBI sections. He was assigned extra responsibility for the fintech department and financial market laws in January of this year. In addition, he is in charge of foreign exchange, overseas investment, activities, and currency management. He has contributed significantly to the creation of the Central Bank Digital Currency (CBDC).
Shankar has held a number of high-level roles since joining the RBI in 1990, including Executive Director in charge of risk management, IT, and payments.
He was a consultant for the International Monetary Fund (IMF) from 2005 to 2011, specializing in debt management and government bond markets. Additionally, he chaired the Indian Financial Technology and Allied Services (IFTAS) committee.
T Rabi Sankar is a Jawaharlal Nehru University alumnus with an M.Phil. in Economics.
16th Finance Commission
The 16th Finance Commission was established on December 31, 2023. The commission is being headed by Arvind Panagariya, a former NITI Aayog vice-chairman. It is anticipated that the commission will submit its recommendations by October 31, 2025, and they will be effective for five years starting on April 1, 2026.
What is Finance Commission?
A constitutional entity, the Finance Commission makes recommendations about the financial relationship between the center and the state. During the five-year period from 2021–2022 to 2025–2026, the former 15th Finance Commission, led by NK Singh, suggested that states get 41% of the Center's divisible revenue pool. This recommendation is identical to that of the 14th Finance Commission, led by YV Reddy.
