New Delhi: Government has decided to give Bimal Jalan another two-year extension as Governor of Reserve Bank of India, highly placed sources in Finance Ministry said in Delhi on June 27.

A notification on it is likely to be issued in the next three to four days, sources said.

Jalan's second term as RBI Governor is slated to end later this year. His name is understood to have been forwarded by Finance Minister Yashwant Sinha himself amidst reports that former Finance Secretary Vijay Kelkar's name was under consideration for the coveted position.

Sources said that Jalan, who was first appointed as RBI Governor in 1997 for three years, was favoured by the government to maintain the momentum of financial sector reforms as also its stability.

Jalan, a votary of soft interest rate regime, has been emphasising improvement in the performance of banks in terms of lowering of transaction costs to pass on the benefits of low interest rate regime to borrowers.

Jalan's continuation as the head of RBI is also significant as the apex bank is slated to have a new Deputy Governor after incumbent Y V Reddy's appointment at International Monetary Fund.

Vepa Kamesan was inducted as one of the Deputy Governors of RBI in 2001.

PTI