Functioning of the Reserve Bank of India - A.Chandramouliswaran

I am using the medium of this Newsletter to express my views on​ certain issues concerning the RBI as I find that this has a wide readership amongst not only the retired officials but also the serving officials.

Central Government, under the dynamic leadership of Shri Mody, is taking many steps to improve Governance. Reserve Bank of India cannot afford to lag behind especially since it had a record of much better standards of governance and efficiency. 

It needs hardly any emphasis that the rules/regulations issued by the Bank to the entities regulated by it would serve their purpose only if they are implemented by the latter. It has been my experience ( now that I have been on the other side of the fence for a pretty long time) and also the experience of many others that banks do not follow the instructions issued by the RBI in a wide range of areas starting from payment of Savings Bank interest for delay in credit of cheques deposited into the account, clear description of the transactions in the Passbook/Statement., maintenance of minimum balance in a Savings Bank account, prompt payment to beneficiaries of inward remittances from abroad and payment of interest for delays in such payments, observance of regulations relating to foreign exchange remittances for residents for various personal purposes, remittances to non-residents from balances in their accounts, issue of Foreign Inward remittance Certificates (FIRC) and hundred other areas. With large scale delegation of powers to authorised dealers in the area of foreign exchange remittances, the intention of the Reserve Bank of India for good customer service is totally frustrated by the ignorance and carelessness of the branches of authorised dealers. I am aware of the difficulties in tackling this task. But then, if this is not tackled by suitable internal and external audits, including that of RBI, good and efficient customer service would not be achieved notwithstanding appointment of any number of Customer Service Groups/ Committees.

I would next come to the functioning of the RBI. In our times decades ago, the officials could perhaps be accused of an attitudinal problem in that generally they were perhaps negative in their approach and strained every nerve to find an argument to say "No" to the request!! This was perhaps conditioned by the atmosphere prevailing then. In recent periods, it has been my experience that while the officials are helpful and have a positive and helpful attitude, they are not always found to be thorough with the rules/regulations and the latter ingredient is also a prerequisite for efficient and good customer service. The policy of the RBI relating to placement of officials and the relaxed and liberal approach to the level of efficiency including the speed of disposal expected of them in practice may have take some some blame for this situation. Responses to clarifications sought on the instructions issued by the RBI and grievances of members of the public are very much delayed. It is high time that time limits for disposal of letters addressed to the Bank are laid down and enforced ruthlessly. As if the delay is not sufficient, the contents of the reply from the RBI are on occasions frustrating when the letter says that "the Bank has carefully considered the request but regrets its inability to be of any assistance in the matter." Such replies are better avoided even in their internal communications to the employees even though they are common and perhaps continue till this day. If my memory serves me right, there were instructions issued much before I retired long long ago that  explanatory remarks have to be given for the decision of the RBI in its communication to a member of the public who had approached it for any matter. Unfortunately, these instructions are not being followed even now. 

- A.Chandramouliswaran