The decision to unshackle one of the biggest bureaucracies in India was taken at a top-level meeting attended by Jalan, deputy governors YV Reddy, SP Talwar and Jagdeesh Capoor, besides executive directors, chief general managers and general managers in the first week of December.

The first internal restructuring at the central bank took place in August this year when posts of 22 chief general managers at the RBI central office were reshuffled.

According to the plan, the heads of the regional offices -- chief general managers -- have been redesignated as regional directors and substantial powers are being bestowed on them to carry on dailyactivities without consulting the central office. Traditionally, the regional heads independently look after industrial relations, administration and the banking department (which includes currency management and activities of a banker to the government), while the regional wings of the department of banking operations and development (DBOD), department of supervision (DoS), industrial & export credit department (IECD), among others, directly report to the central office.

Following the recast, all regional offices will handle operations independently. "They will represent RBI at all state-level meetings and the regional directors will be responsible for any development in the financial circle in the regions -- be it the collapse of a finance company or crisis in coin circulation," sources said.

Sources said the budget allocated to these regional directors will also be hiked in accordance with the new designation. Along with the new responsibility, the regional directors will also be entitled to new perksand facilities which could be even higher than the entitlements of RBI executive directors in some cases.

"Transfer to the regional offices will no longer be viewed as punishment transfers. With this change, senior RBI officials will look forward to head regional offices," insiders said.

According to sources, Jalan has made it clear that all decisions, except those for recruitment and monetary policy framework, can be handled by the regional directors. "The decision not to grant powers on recruitment was taken as it can lead to favouritism," a source said.

A good house-keeper, Jalan has also directed all RBI offices to spruce up the premises and wear a new look which is befitting of the country's central bank, harp on better customer service and go all out to promote information technology.