India on Monday appointed finance ministry bureaucrat Sanjay Malhotra to helm the country's central bank, a day before his predecessor's term was due to end.

Malhotra will steer monetary policy in the world's fifth-largest economy after weeks of speculation over whether his predecessor Shaktikanta Das would have his term extended again.

A notification from the Indian cabinet's appointments committee said Malhotra had been appointed to lead the Reserve Bank of India (RBI) for a "period of three years" starting from Wednesday.

Malhotra is an engineering graduate and has a master's degree in public policy from Princeton University, according to the finance ministry website.

Currently the secretary of the revenue department, he will take charge at a time when pressure has been building on the RBI to cut interest rates as economic growth slows.

India's economy expanded at 5.4 percent in the September quarter, a nearly two-year low and well below the RBI's estimates of 7 percent.

Despite this, the central bank's monetary policy committee has held interest rates steady at 6.50 percent since February 2023, citing ongoing inflation risks.

Local media reports had earlier speculated over the future of Das -- first appointed to head the RBI in 2018 -- after India's September quarter GDP data missed estimates. "Several quarters of the government have voiced the need for lower interest rates considering inflation excluding food prices," analyst Teresa John of Nirmal Bang Institutional Equities said in a note.

Malhotra was "likely to be familiar with the current thinking in government circles and amenable to their views," she added.

John said that her firm expected a rate cut by February with growth increasingly likely to "undershoot the RBI's forecast".