........As is well known, Mr Subbarao was not exactly popular with the Union finance ministry and the government, which was wide open to the idea of corporate houses getting bank licences. He was widely seen to be stalling the process and retired before the licences could be issued. The new RBI Governor, Raghuram Rajan, went one better..........
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While I disagree with many of the words used in the conclusion which reads “The mandarins who run the Union finance ministry come from the top of the civil service examination merit list; those who run the postal department come from far below. How can a Brahmin find so much merit in an OBC?”, it is tough to find reasons to contest the grounds for making such an observation.
Last few years have seen the central bank(Reserve Bank of Inda) as an institution fighting a lone battle to perform its mandated role as efficiently as it would have enjoyed doing. Most of the Governors and Deputy Governors who were in position during the last decade and a half, did understand the role expectations from RBI once they started operating from Mint Street. But the hostility of lower rung finance ministry officials for extraneous reasons made their life difficult.
This resulted in the evolution of three power centres, namely RBI, its Governor and the finance ministry taking different positions on important policy issues. It is comforting to find that Dr Raghuram Rajan has been able to assert leadership and coordinate among these three divergent pulls and pushes. His willingness to unlearn what is not relevant to the Indian context and to prepare RBI to meet the new challenges by making the priorities clear to his deputies insde RBI and giving expression to his expectations from GOI in no uncertain words gives one hope about RBI getting back on the right track quickly.
M G Warrier, Thiruvananthapuram
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