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.
Friday, September 6, 2013
First term at Monetary Towers - Dr.S.S.Tarapore
Governor’s first day
New man on Mint Street
.......Unlike the RBI Governors of the past, in the age of 24x7 television and instant communications, Rajan will have to make the RBI functioning transparent and people- friendly. Opacity of the central bank operations when it speaks only to the finance ministry spooks markets. Rajan, with his easy communications skills and his first- rate academic credentials, has his task cut out. He will have to guard against being lovey- dovey with the finance ministry mandarins. Bureaucrats and bankers should learn to co- exist but not encroach on one another’s toes..........
Walking the talk?
......At Raghuram Rajan's first press conference, however, Executive Directors and Deputy Governors preceded him into the hall and the new governor walked in unaccompanied a little later. A change of style with a change of guard?
Well begun...
.........There is very little in the extensive plans that Dr Rajan laid out in his speech that can be questioned in terms of merits. Ultimately, by the end of his term, he may accomplish some of the objectives that he articulated and may fail on others. But it is reassuring to know that he starts his term with an equal emphasis on the immediate situation and on the structural changes that the entire financial system needs to make.............
Taking guard
Raghuram Rajan's first move as India's monetary czar has been to solemnise a marriage between a needy country and its greedy diaspora. That's the easy part. Tackling the gruelling Indian stagflation will be the real test for the former International Monetary Fund chief economist...........
More fresh air
........ but it is equally likely that it was a Rajan effect, a consequence of the fact that Dr Rajan is smart, relatively young, and brings new ideas to an institution that some thought had begun to labour under the weight of its own history and precedent. Dr Rajan's comprehensive opening statement and his commitment to communication made a good impression - as did his forthright manner and the way that he expressed his willingness to take unpopular decisions, saying that he was not in the job to earn "Facebook likes".........
Promising start
....Rajan has said that he expects close co-operation and co-ordination with the government and the call should not go unattended. He has also spelt out plans to improve the monetary policy framework, strengthen the security market and move fast towards issue of new banking licences. While stressing the need for banks to clean up their balance sheets he has also warned major defaulters of loans of strong actions.These do not make a comprehensive agenda. But the fact that he has spelt them out, unusually for an RBI governor on the first day of his office, shows that he thinks they are matters that need urgent attention...........
Into the pressure cooker
.........If anything the pressure may flow in the other direction, with Mr Rajan having to defend the RBI’s independence. The government wants the RBI to give bank licences to well-connected tycoons; Mr Rajan, sensibly, opposes this and wants more small banks to be created. Official proposals are circling to put monetary policy in the hands of a new committee dominated by external government appointees, and to give the finance ministry, not the RBI, authority for financial stability. Mr Rajan should fight both suggestions. India is lucky that Mr Rajan is in the RBI job. He will be a bulwark against populism and an advocate of liberalisation. But his hardest task is to avoid being labelled a saviour..........
Accolades for VITALINFO
Dear Mr Tarambale,
It is
indeed a pleasure to read the accolades you are getting for the fantastic work
you are doing. Congrats. Keep it up. I had the good fortune to have worked with
you. I found you always more than equal to the task and very sincere in
tackling whatever was assigned. It was also a pleasure meeting you personally
at Pune last month. Good luck and God speed.
- B K
Katyal, Ex Chief General Manager
Excellent.
Congratulations. You get this appreciation because you deserve it. This is
the appreciation of your dedicated work, from respected Sir Tarapore. It's
great. Keep it up.
– Raghu
Gujar, Ex-PS
Congrats! It is very creditable for you to receive such
remarks, good words from Dr.Tarapore. Carry on your good work!
Wish you all the best.
- G.K.Kirloskar, Chembur, Mumbai -71
Congrats! You deserve
it as rightly said by Dr Tarapore. Kudos to you.
– R.K.Sunder,
Ex-PS
Dear Tarambale,
This is to request you to kindly include in your email address Mr P.R.Gopal Rao our former Executive Director. He is very keen to have your VITALINFO blog and he was excited when I informed him about this and its utility.
- Dr. T.V.Gopalakrishnan
‘Unlearn’ the IMF lessons
Dr Rajan, as is evident from his academic and professional record, is a fast learner and capable of finding solutions to the toughest of economic and monetary problems. His challenges lie in (a) how fast he will be able to ‘unlearn’ the IMF lessons which were modeled with prosperity of the developed world in view and (b) how quickly he will get convinced about the historic dual responsibility of RBI to ensure distributive justice while supporting economic growth and reframe his arguments to convince North Block that after all RBI has been on the right path and what the central bank lacked was the support from GOI. Inside Reserve Bank of India, Dr Rajan will get a more accurate feel of the role played by RBI since its inception in the evolution of the financial system to meet the country-specific needs. The changed perception will also tell him why the cut and paste FSLRC report is not finding favour inside RBI.
- M.G.Warrier
The maiden speech is a set of good intentions, outspoken like his predecessor, with an action agenda.The two goals of making financial inclusion stronger and having the MSME sector and Agricultural Sector having their due share in credit flow had their policy roots strong earlier. It remains to be seen as to how he would trigger lending in these two areas when the primary lenders consider them as high risk, no matter whatever confidence measures you provide. How he can influence the government to stop announcements regarding interest waivers and loan waivers that have eroded the confidence in these sectors, will be the key to the success. Regarding Financial Inclusion, when the grassroots institutions like the PACS that outnumber rural branches of all scheduled banks, around 97000 are sought to be taken out of the mainstream how the agenda of FI can be fulfilled with the required speed? These are tough areas on his radar. There is internal resistance and external ambivalence in the pursuit of this agenda.
- Yerram Raju
Vannila reporting
My View on "Institute of Actuaries of India expels R Kannan..":
The reporting in TOI is a real vannila reporting without any information on why this extreme action of expulsion of such a senior member. Who will tell why this has happened? Why this expulsion? What is the basis of slapping a token fine of Rs.5 lakh only if the financial irregularities (which may include some fradulant act also) were serious, then the authorities should have recovered the full amount of loss withe and also taken criminal action against the member. Why no information on this. TOI may need to investigate it further and come out with the truth which will expose those who had gone beyond their brief and helped him to escape with a slap of a small fine and expulsion. - S.Santhanam
Stop mocking at retirees, House tells govt
.....It also asked the government to immediately link pension with the price rise neutralisation to ensure that the pressure of inflation is not felt too acutely by the pension drawing members. It said the wage ceiling of Rs 6,500 under the scheme is in vogue for more than ten years and hence the need to enhance it to raise the pension amount.....
What has inflation come to? Go back to the movies for an answer
........In the last two decades, the loss in value of money is reflected in Bollywood too. Tens have no value. Hundreds have been replaced with tens of thousands; a lakhpati is a common man, a crorepati is middle-class. It is those with hundreds of crores (if not thousands) who are classified as rich. And, if that doesn’t tell you about inflation, nothing will. Money makes the world go around, go the lyrics to a famous song. But money that made the world go around yesterday is no longer enough today. And, that really is the crux of inflation.
India corrects error in mislabeling local firm as China-based
.....Citing the RBI letter, signed by Vandana Khare, General Manager of the bank's Foreign Exchange Department, Tien said that Continental Engineering can hereafter set up investment project offices in India in accordance with standard procedures.............
Raghuram Rajan: Man on a mission
Meet "The Guv": Rock star welcome for RBI chief Rajan
Less than 24 hours in the job and he has already been dubbed “The Guv” by a gushing Indian media and portrayed as a suave James Bond-like figure coming to the rescue of the country’s crashing currency. With the ink of his signature still drying on the oath that made him the 23rd governor of the Reserve Bank of India (RBI) on Wednesday, Raghuram Rajan, stunned investors by announcing a raft of measures aimed at shoring up the beleaguered rupee. His statement triggered a rally in the rupee and a surge in shares............
Consumer Protection: What Raghuram Rajan missed talking about
.........Mr Rajan may like to know that Banking Code and Standards Board of India was created to enforce ethical and consumer-friendly practices but the code is voluntary. Brilliant, innovative and energetic that he is, we believe that Mr Rajan will have some new thoughts on effective consumer protection in the banking sector too. We wonder when he will start articulating his thoughts in this direction.
The saviour trap
....... a big risk is that he is labelled as a saviour when India’s economic destiny is largely in the hands of its government, not its central bank. Nonetheless Mr Rajan did hype-up his speech by arguing his immediate agenda “involves considerable change, and change is risky”. That, to my mind, is an overstatement. The proposals made last night were sensible, but modest, with two exceptions. Both could transform how India works. Both are unlikely to happen soon............
Why Raghuram Rajan is no Amitabh Bachchan
..........Let’s start with inflation. As Rajan said yesterday “the RBI takes its mandate from the RBI Act of 1934, which says the Reserve Bank for India was constituted “to regulate the issue of Bank notes and the keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage.” Hence, the primary role of the RBI is to ensure monetary stability. Or as Rajan put it “That is, to sustain confidence in the value of the country’s money. Ultimately, this means low and stable expectations of inflation, whether that inflation stems from domestic sources or from changes in the value of the currency, from supply constraints or demand pressures.” There isn’t much that the RBI can do to control inflation..................
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