New Delhi, June 30: RBI governor Raghuram Rajan has made a strong pitch for a four-year term for the head of the central bank, saying that a three-year term for the Oracle at Mint Street is way too short.

Rajan, who stunned financial circles by announcing his decision to return to academia in the US when his term expires on September 4, told a group of lawmakers in Delhi that India ought to emulate the global practice of giving the central bank chief enough time to implement his policy agenda.

The RBI governor was briefing Parliament's standing committee on finance at a closed-door session on various aspects about the economy and the gravity of the bad loan mess that plagues the banking industry when a legislator asked him what the ideal term for the RBI governor should be.

Rajan is believed to have drawn attention to the practice at the US Federal Reserve where the chairman and the vice-chairmen - who are members of the Federal Open Markets Committee (FOMC) that decides interest rates - are given a four-year tenure with the possibility of re-appointments.

Alan Greenspan, the US Federal Reserve chief, had one of the longest tenures among global central bankers that stretched from 1987 to 2006 - an incredible five terms that spanned the reign of four US Presidents.

Sir Benegal Rama Rau, a member of the Indian Civil Service, was the longest serving RBI Governor - a term of seven-and-a-half years - between July 1, 1949, and January 14, 1957. In more recent times, Bimal Jalan had a term of close to six years between November 1997 and September 2003. A. Ghosh, a deputy governor of the RBI, had the shortest term of 15 days in 1985 - a sort of stand-in till R.N. Malhotra took over.

While announcing his decision not to seek an extension of his tenure, Rajan had said that he had two unfinished jobs: the formation of a monetary policy committee that would take a call on interest rate cuts, and the clean-up of the balance sheets of banks that have been weighed down by mounting bad loans.

But a rancorous campaign orchestrated by BJP parliamentarian Subramanian Swamy forced Rajan to abandon hopes of a longer tenure.

Rajan, who received an electrical engineering degree from IIT Delhi and an MBA from IIM Ahmedabad in 1987, had earned his PhD in economics from MIT - the academic hothouse that has produced the highest number of central bankers in the world including former US Federal Reserve chairman Ben Bernanke, former Bank of England governor Mervyn King, and European Central Bank president Mario Draghi.

In an interview with NDTV last year, Rajan had described Bernanke - Greenspan's successor - as his favourite central banker.

Earlier today, Rajan had met finance minister Arun Jaitley to discuss a new interest rate-setting mechanism with the formation of a six-member monetary policy committee (MPC).

At present, the RBI governor has the sole prerogative of taking a decision on interest rates after consultations with central bank colleagues and external experts.

"The finance ministry and the RBI keep talking all the time," Rajan told reporters after meeting with Jaitley. "I think we are putting out the structure. Let's see how far it goes."

The MPC will set interest rates through a majority vote. In case of a tie, the RBI governor will have a casting vote. Out of the six members of the MPC, three will be from the RBI - the governor, who will be the ex-officio chairman, a deputy governor and an executive director. The other three members will be appointed by the government on the recommendations of a search-cum-selection committee headed by the cabinet secretary.

The next monetary policy review is on August 9 and the government seems to be in a hurry to appoint the committee before then.

The hunt for the next central bank governor has picked up pace, people familiar with the matter said. Former RBI deputy governors Rakesh Mohan and Subir Gokarn are emerging as strong contenders.

Others on the list of eligible candidates includ current deputy governor Urjit Patel and State Bank of India chairperson Arundhati Bhattacharya.

CII president Naushad Forbes said that industry was confident that the government would appoint a strong successor to Rajan.

"I do not think it will have any impact on investment sentiments. Investors are much more concerned about economic opportunity," Forbes added.