The Reserve Bank of India has shot down a proposal to appoint a fourth deputy governor exclusively for the co-operative sector.

Union Minister of State for Finance Anandrao Adsul has been pushing for a fourth deputy governor to regulate the affairs of co-operative banks for quite some time.

Speaking on the subject in May, he had said the appointment would be made within two months and the proposal had been cleared in principle by the Centre.

Sources close to the central bank, however, said the RBI was not in favour of the proposal. The RBI Act has provision for a fourth deputy governor, but the RBI has not had one for quite some time.

The last time was in 1992, when the fourth deputy governor, P R Nayak, was also the ex-officio chairman of Nabard.

In the late 1990s, there were four deputy governors for a few months because of the overlapped tenures of R V Gupta and Jagdish Capoor. The latter had come back from his stint at the Unit Trust of India.

Adsul is keen on a fourth deputy governor because he wants an official to exclusively supervise the operations of co-operative banks and clean the system.

However, industry sources explained that unless the system of dual control was over, it would be difficult to clean the mess.

The RBI supervises co-operative banks, and the registrar of co-operative societies, appointed by the state government, oversees their administration.

Over 10 per cent of the 2,058 urban co-operative banks in India are weak and 13 of them are being liquidated.

The banking sector expects several more co-operative banks to be liquidated in the near future.