............This move to appoint Rajan as an OSD in the RBI has come as a surprise to many in the banking circles. It is the first time ever that an RBI Governor-designate will serve as an OSD in the central bank ahead of assuming charge, say RBI watchers. Some RBI observers welcomed the move and said it could help in a smooth transition for Rajan....................
The very purpose of VITALINFO is to provide a platform for wider dissemination of updated information related to and happening of events in and around RBI.
Thursday, August 8, 2013
Journey to Mint Road
........... In his youthful looks, Raghuram Rajan, the RBI governor-designate, is comparable to C D Deshmukh, who was appointed the RBI governor in 1943 (under whom I had worked). Rajan will be the first engineer (holding a BTech degree) ever to be the Governor.............
Sakha Awards
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| Bhim R Garg, Ex-AGM, RBI, Chandigarh |
Sakha Awards 2013 were bestowed by Padmashree singer Shanti Hiranand to distinguished personalities for their respective contributions in various fields. The Function was organized jointly by The Socio-Cultural Societies PECOBA and Sakha in collaboration with Epicentre, Gurgaon. Those honoured with Sakha Awards included film music researcher Bhim Raj Garg of Chandigarh (whose encyclopedia of Punjabi Film songs is under print), Durga Shakti Nagpal (IAS), Dr DR Saini, Saraswati Music College, Delhi (originally established in 1924 in Lahore where singer Mohd Rafi and music director OP Nayyar were the students), music composers Mohinder Sarin and Chhote Lal, Satpal Narang (radio and TV programs producer), lead singer Simrat Chhabra and Mamta Vani.
- Madan Gauria, EXRBITES Group
No substitute for Mahatma image on currency notes: RBI Committee
Vital initiative
Dear Mangesh,
I am Dr. S. L. Shetty of the erstwhile DEAP. I have liked your initiative on Vital information on RBI-related issues. I have one suggestion which is that the RBI Newsletter and RBI Monetary and Credit Review do provide some information of general use. Please pick up some of them, if you think they are of general interest.
Many thanks and regards,
- S. L. Shetty
Subbarao faced hostile political environment: AK Bhattacharya
......... Reddy faced a different set of challenges, arising out of a strengthening rupee, growing economy and rising foreign exchange reserves. And he handled those challenges very competently. He also had to deal with a more favourable political environment. In contrast, Subbarao's challenges were more difficult as a result of the economic downturn, falling reserves and a depreciating rupee. You could say that Subbarao made a valiant attempt to minimise the damage, but he also faced a much more hostile political environment, I think..............
A silver lining - A.Seshan
............Now that a non-IAS gentleman is the governor-designate, the IAS lobby will start working to claim its share in the DG's posts. Neither the Bhagvad Gita nor the Bible stipulates that an IAS babu should have a finger in every pie. The RBI unions at all levels should be alert and do the needful sufficiently in advance before the interviews for the appointment of a DG. The list of interviewees should contain only the names of executive directors of the RBI.
Let autonomy of the RBI be guarded - A.Chandramouliswaran
I am happy that Dr Raghuram Rajan whom I desired to see as the Governor has been appointed to take over from Dr Subbarao when the latter's tenure ends on September 4, 2013. His academic achievements are incredible with a Gold medal both in IIT and IIM, Ahmedabad thus matching those of Dr Subba Rao. Dr Rajan has also got his PhD. from MIT, USA. It is said that that he had secured at a very young age tenure post of Professor of Finance in the Chicago University. He can be expected to be innovative and bold in regard to the financial sector in India and not be conditioned by the past thinking. It is a pity that the recommendations of the Committee on Financial sector reforms headed by him were completely ignored. One can expect that he would take up some of those recommendations. One also hopes that RBI sheds, under his initiative, some of the less important functions in regard to supervision of banks so that it can concentrate on more important matters. One also expects that he would totally disapprove of issue of directives by the Banking Division directly to the banks. He should send a clear signal to banks that it is to the RBI that they would have to look to for guidance. Shri Yeshwant Sinha, while wishing Dr.Raghuram Rajan all the best as the Governor, has expressed a hope that the latter would be willing to jealously guard the autonomy of the RBI. The support to the Governor from the leading opposition party should be helpful to him in preserving the autonomy of the Bank. We wish him all the best in his new assignment.
- A.Chandramouliswaran
RBI’s independence
This refers to the report “Rajan tasked to fix faultlines” (Business Line, August 07). RBI governors in the past have not been able to reduce the influence of the Finance Ministry over the role of the central bank. The independence of the RBI governor has been limited to monetary policy changes. The fact is that the Finance Minister is intelligent to project its disappointment over such changes as if it is helpless, and the media is quick to point out the overriding role of the central bank. To that extent, the media is also responsible for misleading readers about the independence of the central bank. The growth-inflation challenges have kept central bank governors busy in the past and the new governor is no exception to this.
- K.V.Rao, Bangalore (HBL)
For RBI Guv, it’s Kissa Kursi Ka
Kudos
to the new RBI Governor, Raghuram Rajan — one of the youngest. At his
age, most government officers would be joint secretaries. But I am
amused and curious to know how and why the babu lobby “lost” the race.
Of the 23 governors, 14 were babus. The reason why the babu lobby may
not have been so interested is the state of the economy and the fall in
the rupee. None of them are possibly capable, and even if so, not
willing to sit in the hot seat. The government may want to take some
undesirable measures that the RBI may not want. So, let someone else
step in and face the music. If he fails, they will smirk. If he does
well, then the song will be, “we could have also done so”. Witness how
non-babu Sebi chairmen were hardly allowed to function. It will not be
surprising if they make life miserable for the new incumbent. Some say
that he is an IMF plant. So, Mr Rajan, whatever you are, best of luck
and watch out for the plantain skins placed by the ministry of finance.
- T R RAMASWAMI , Mumbai (ET)
- T R RAMASWAMI , Mumbai (ET)
Islamic banking proposal may get a push under Rajan
New Delhi: With appointment of government's Chief Economic Adviser Raghuram Rajan as the next RBI Governor, Union Minority Affairs Minister K Rahman Khan Tuesday hoped that his ministry's plan to establish Islamic banking in India will get a boost. Khan said Rajan was positive when he met him recently to push the proposal..............
Govt and RBI: Good cop, bad cop
...........If you repeatedly say something at variance with the truth, that something sometimes becomes the truth itself. This “principle” — if we can call it that — as everybody knows, has been used repeatedly in the political sphere; not only in India, but globally for devious ends (Joseph Goebbels comes to one’s mind immediately). That principle now seems to be playing itself out in the economic sphere in India. The reference is to the so-called disconnect between the Government of India and the Reserve Bank of India as regards their goals and strategies. In the economic sphere, though, the supposed “disconnect” should actually become the truth for the overall common good!................
Pragmatist in RBI
.............The government has a major role in getting the economy back on track, but expects the RBI to do the same. While the finance minister may not find a "yes man" in Rajan, the new RBI Governor will find many obstructions and road blocks to implement his "pragmatic" views.
Is Raghuram Rajan UPA's answer to all economic issues created by itself?
..........It may be too much to expect Rajan, who also serves as Eric J. Gleacher Distinguished Service Professor of Finance at the Booth School of Business at the University of Chicago, to wield a magic wand to mitigate the crisis, considering that much of the current problems have their roots in a wasteful second term of the UPA government, riddled by corruption, policy inaction and neglect of the industry. But many hail him as the right choice in the present circumstances. C Rangarajan, Chairman of the Prime Minister's Economic Advisory Council, said Rajan was an 'excellent choice', since he was now familiar with the Indian economy, and would handle all issues in a "mature" manner..............
Both finmin and RBI may be wary of Raghuram Rajan
..........On the downside, he has never made policy. Unlike D Subbarao, YV Reddy and Bimal Jalan – his three immediate predecessors at RBI – Rajan has not had the experience of taking large macroeconomic policy decisions before being crowned king of Mint Street. Administering macroeconomic policy, with its huge overall impact, is an art in itself. This means he won’t have an old-boy network of IAS officers to lean on. If anything, they may already be looking at him as an adversary, having usurped their job. Heading the RBI comes with another challenge. It is an institution with vast and deep experience and often has a mind of its own. Its arch adversaries in the finance ministry accuse the institution – in private, of course – of stubbornness and of fighting turf wars in the guise of public interest. I don’t think these are entirely fair accusations to be made of the RBI, but the perception is important..............
Back to encounter with ‘starved lions’
........North Block and Subbarao had not seen eye to eye for quite a long time. Subbarao refused to toe the finance ministry line that economic growth should be the RBI’s top priority. Instead, he argued, that inflation remained his primary concern, prompting him to delay rate cuts and soak up liquidity from the financial markets to check the wobble in the rupee. If Rajan and the finance ministry see eye to eye, the government may not need to accept the recommendation of the Justice B.N. Srikrishna report on financial sector legislative reforms which had said that a monetary policy committee ought to be formed to take policy decisions as in the West. The recommendation seeks to dump the current practice where the governor — and the governor alone — takes the final call.............
The promise of change
...........What is needed is a combination of monetary loosening and fiscal tightening, in the form of redirecting government expenditure towards investment in railways, roads and other infrastructure, to revive the stalling growth engine. This requires coordinated action from the RBI and the Finance Ministry and a change from the virtual breakdown in communication between Mint Street and North Block over the past couple of years. The Government couldn’t have chosen anyone better than Rajan as RBI Governor; but its responsibility does not stop just there.
Raghuram Rajan on central banking—in his own words
...........Well, with a plunging GDP, the plummeting rupee, a yawning current account deficit, deteriorating asset quality in banks and stubbornly high retail inflation, Raghuram Rajan couldn’t have wished for a bigger crisis. We wish him the best of luck in coming out of it.
Rajan has tough job in hand, warn IIM-A faculty
.......An IIM-A alumnus, Barua has been taught by former RBI governor C Rangarajan at the campus. In turn, Barua went on to teach Rajan during the latter's stint at IIM-A campus as part of the 1985-87 batch. "While Prof. Rangarajan taught me, I got to teach Raghuram Rajan years later. I remember him as an outstanding student who could combine rigorous analysis with ability to interpret the results of such analysis for effective implementation. He is an excellent choice as RBI governor," says Barua...............
The promise of change
................ What is needed is a combination of monetary loosening and fiscal tightening, in the form of redirecting government expenditure towards investment in railways, roads and other infrastructure, to revive the stalling growth engine. This requires coordinated action from the RBI and the Finance Ministry and a change from the virtual breakdown in communication between Mint Street and North Block over the past couple of years. The Government couldn’t have chosen anyone better than Rajan as RBI Governor; but its responsibility does not stop just there.
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