Both the posts will be filled in immediately as the post of the fourth deputy governor has been lying vacant for over a year now. RV Gupta -- an IAS from the banking division of the ministry of finance -- retired in November 1997.

Going by the convention, one commercial banker, an IAS and an insider occupy the three deputy governors' posts. Among the three present DGs, Reddy is an IAS (from the banking division, ministry of finance) and economist while Talwar is a commerical banker (his last posting was chairman, Bank of Baroda) and Capoor an insider (who had a stintas UTI chief on deputation). Till November 1997, the fourth deputy governor's post was also occupied by an IAS.

While Capoor handles exchange control, rural credit, industrial and export credit and internal administration, Talwar's portfolio includes department of banking operations, supervision of banks as well as non-banking finance companies, internal inspection and information technology. Reddy, who stepped into SS Tarapore's shoes, is in charge of the monetary policy, exchange rate management, internal debt and the department of economics.

Logically, Talwar's post should be filled in by a commercial banker while Capoor's chair should go to an insider. However, if sources are to be believed, the IAS lobby has already become active and one bureaucrat from the banking division is keen to be shifted to the 18th floor at the RBI central office on Mint Street, Mumbai.

If he succeeds, the move could effectively seal the chances of internal candidate RBI executive director A Vasudevan making it as DG onthe basis of being the seniormost executive in the third tier of the central bank. RBI insiders however feel that the bank will impress upon the finance ministry to maintain the convention of having a mix of internal candidate, commerical banker and an IAS. In case the Reserve Bank opts for a fourth DG, another IAS may get the nod, sources said.

According to sources in North Block, the search has already started for a commercial banker to step into Talwar's shoes, who headed Bank of Baroda, Union Bank and Oriental Bank of Commerce before joing the Reserve Bank.

While both MS Verma and MG Bhide -- the two high-profile bankers-- have hung up their boots, two other commercial bankers who could have made it were BoB's K Kannan and Canara Bank's TR Sridharan. However, both of them are retiring shortly and hence the choice may fall on either Punjab National Bank chief Rashid Jilani or Vysya Bank chairman KR Ramamoorthy, who left Corporation Bank to join the private sector bank.