Warrier's blog

WEEKEND LIGHTER : RELEVANCE OF TOLERANCE (This week, Weekend Lighter is publishing Dr Raghuram Rajan’s convocation address at IIT, Delhi on October 31, 2015. Reason being, many are commenting on the speech without referring to the text.) M G Warrier  “The golden rule of conduct is mutual toleration, seeing that we will never all think alike and we shall always see Truth in fragments and from different points of vision.” Mahatma Gandhi Tolerance and Respect for Economic Progress* Thank you very much for inviting me back to the Institute to deliver the convocation address. I graduated with a degree in Electrical Engineering 30 years ago. I was overly anxious then about what the future held for me, because I did not realize that the Institute had prepared me so well for what lay ahead. Our professors – and I will not single out any to avoid a disservice to those I do not name – were dedicated professionals. They asked a lot of us, knowing that in challenging us the

Letters: Much more to be done | Business Standard Letters My letter on Ease of doing business in India(WB ranking of nations) M G Warrier

Reforms need to reach the needy - The Hindu My VIEW: Very informative and timely analysis, as the content may help GOI in deciding priorities in the Budget for 2016-17. The following comparisons(quoted from the article) are of academic interest only, as the growth rate during last century may not be amenable to realistic comparison with that of post-reform era for various reasons including higher level of inflation during the last 10 to 15 years: "What has been the record of India in terms of economic growth and social development in the post-liberalisation period? In the post reform period beginning 1992-93, the economy has grown at an average rate of 6.8 per cent. In the more recent period, the growth rate has been even higher. Over the decade beginning 2004-05, the average annual growth rate has been 7.6 per cent. Between 2005-06 and 2010-11, the growth rate was 8.7 per cent. Contrast this with the annual growth rate of 3.5 per cent between 1952 and 1980." M G Warrier,

Leave Small Savings Rate Alone! - Moneylife My VIEW: This refers to the response "Leave Small Savings Rates Alone" There are several inter-related issues affecting interest rates on deposits. When RBI cuts base rate, banks quickly act by passing on the impact of the rate cut by reducing deposit rates, though the hurry is not that evident in reducing lending rates at the ground level, as banks know how to maintain the level of interest income despite changes in prime lending rates. Going by the finance ministry announcement about the ‘review’ of rates on PPF and Small Savings, which according to the ministry, stands in the way of banks in reducing interest rates, the reduction in interest rates on PPF and Small Savings is imminent. Those who are responsible to pay interest have every right to review the rates and bring it down to their advantage. But, those who have invested their savings with a long term perspective considering the security and liquidity concerns, should

HRM IN BANKING INDUSTRY The current industrial unrest in banking industry which include an ongoing agitation in RBI deserves to be handled with care by opening doors for bilateral discussions. Time alone will not resolve the deep-rooted issues relating to job security, compensation and social security issues like those relating to pension. This refers to the report “Bank staff to go on nation-wide strike on December 2” (Hindu Business Line, October 27). It is easy to brush aside AIBEA leader CH Venkatachalam’s observation that ‘Bilateralism is given a go-bye and unilateralism is sought to be made the rule. Law is ignored and trade union rights overlooked’ as just another morale-booster for the agitating workmen. But, it describes the approach of those in charge of HR management in government and private sector. Time was, when government and managements took industrial unrest seriously and either resolved the issues affecting employees which caused such unrest or conveyed the me

Role of banks and financial intermediaries - The Hindu My VIEW: The article is immensely relevant in the context of the reforms in the financial sector now under way. The prime objective of the reforms is to retain the health of the banking system and to ensure that (i) banking business remains with banks regulated by RBI under Banking Regulation Act, 1949 and RBI Act, 1934 and (ii) banks are able to live up to the role expectations in regard to mobilising and managing deposits ensuring safety and liquidity and a reasonable return to the savers while deploying the funds mobilised to promote economic growth and financial inclusion. RBI’s recent efforts to help banks reduce their stressed assets, bring more players who are already doing ‘banking business’ into regulatory and supervisory discipline applicable to the existing mainstream banks and consider possible structural changes within the banking system to infuse professionalism and efficiency should be viewed in the ab

October 26, 2015 Relevance of banks This refers to C R L Narasimhan’s article “Diminishing a bank’s traditional role” (The Hindu, Financial Scene, October 26). The article is immensely relevant in the context of the reforms in the financial sector, now under way. The prime objective of the reforms is to retain the health of the banking system and to ensure that (i) banking business remains with banks regulated by RBI under Banking Regulation Act, 1949 and RBI Act, 1934 and (ii) banks are able to live up to the role expectations in regard to mobilising and managing deposits ensuring safety and liquidity and a reasonable return to the savers while deploying the funds mobilised to promote economic growth and financial inclusion. RBI’s recent efforts to help banks reduce their stressed assets, bring more players who are already doing ‘banking business’ into regulatory and supervisory discipline applicable to the existing mainstream banks and consider possible structural changes w

The NJAC verdict: An alternative view | Business Standard Column My VIEW: An alternative approach This refers to the excerpts from Finance Minister Arun Jaitley’s Face Book posting published under the caption “The NJAC verdict: Alternative view” (BS, October 25). While respecting the Apex Court views and conceding that there can be different views on the verdict especially among politicians and lawyers and keeping in mind that this space cannot do justice to any discussion on the 1000-page judgement, one is tempted to make an ‘appeal’ to the political leadership, not to contest the grounds relied upon by the court in reaching at the decision just because it causes administrative inconvenience. Instead, government should dispassionately consider what kind of changes in approach to selection procedure for filling top positions, not only in judiciary, but across institutions, will improve governance and administration of justice. The change in approach should factor in the

A prescription for the IMF - The Hindu My VIEW: It would be in the long term interest of organisations like IMF and UN to think of reforms which will help them serve the interests of all member-nations irrespective of their present stage of economic development. If world bodies allow themselves to be dominated by so-called developed countries who are retaining their ‘management’, different geographical areas and ‘developing’ nations will form sub-groups to protect self-interests. The signals being sent out by organisations like BRICS by forming parallel financial institutions should be taken note of by richer nations. Interdependence and mutual help can make living on this planet more peaceful and comfortable for all. M G Warrier

RBI setting up IT subsidiary: Rajan | Business Line My VIEW: October 24, 2015 RBI’s IT initiative This refers to the report “RBI setting up IT subsidiary: Rajan” (The Hindu Business Line, October 24). The welcome initiative is consistent with the central bank’s tradition in institution-building to ensure timely infusion of professionalism to promote growth in various sub-sectors of the Indian economy. RBI has participated effectively in the setting up of institutions like SBI, UTI, IDBI, SIDBI, NABARD and Exim Bank, which are playing significant role in their respective areas of specialisation. The delay in developing an IT arm capable of guiding the massive IT-related work which is now being outsourced sporadically has caused considerable losses to the institutions in the financial sector. Apart from financial losses, absence of guidance in having compatible programs and processes cause delay in getting data inputs and their compilation and use. It is hoped, the propose

Banks free to fix interest rates on gold deposit scheme: RBI | Business Line My VIEW: The scheme looks attractive. RBI could have given guidance on interest rate, by suggesting a band. I am optimistic about the progress of the scheme in the long term. M G Warrier

Nurtured bonhomie This refers to the report “Finmin Steps Up Ties with RBI as Bonhomie Grows” (ET, October 23). A reading of the History of RBI Volume I will convince the reader that the nurturing of an excellent relationship between GOI and RBI has been an ongoing process all through the evolution of the idea of a central bank for India and both GOI and RBI have maintained the relationship unhurt, despite occasional provocations from either side. By and large, RBI has been lucky in having a mature leadership all along and GOI has been particularly careful in ensuring continuity and professionalism at the top within the central bank. The present effort to fill the vacancies in the RBI central board(out of 17 directors, the term of six has already expired, according to media reports) with the best talent available in India and removing any doubt about the ‘downgrading’ of nominee/s from the finance ministry need be seen as an expression of GOI intention not to disturb the equilibr

Kamadenu: Saraswathi. #Deviseries : Saraswathi. #Deviseries Go to this Blog and enjoy the beauty of Keshav's work. M G Warrier

Weekend Lighter: The Meeting Point, 2015 Ghatkoper, October 22, 2015 Five Ex-Rbites had a dinner meeting @R-City mall, Ghatkoper on Wednesday, October 22, 2015. They were S/Shri PP Ramachandran, PS Balakrishnan, K Ramasubramanian, MG Warrier and R Narayanan and the meeting was arranged by PSB and RN. The link that brought together these five was that each of them had worked in RBI, Thiruvananthapuram during various periods from 1960 to 2007. MGW and RN had joined RBI in the same batch of 1968-69. All five of them now have ‘roots’ in Mumbai. Now, most of us are making efforts to re-establish old connections. That is how senior citizens and netizens of 21 st Century re-invent the joint-family concept of last century, of course, for selfish reasons. We shared memories of our 30 to 40 year survival in RBI. No, we didn’t have time to discuss pension or deeper personal issues, which we will definitely be doing in future meetings. This group with more members will keep meeting as

The Hindu Business Line, October 21, 2015 Letters S&P’s game This refers to ‘S&P retains India’s rating at BBB- with stable outlook’ (October 20). In today’s world two years can be too long to predict growth trajectories of countries like India. Three other factors show the agency’s anxiety to show India in poor light. One, the agency’s expectation as to how a yet-to-be constituted monetary policy committee should function, which is a matter internal to India. Two, the size of India’s GDP is not comparable with GDP figures of developed countries as a large proportion of India’s savings still remain unmapped. Three, for historic reasons, economic development in India has not been uniform in all geographic regions, and some of the relatively more developed regions have populations larger than some developed countries and have a higher level of economic development. All these point to the need for India to set up an internal agency capable of collecting and interpreting da

Transparent tax system must: Raghuram Rajan - Moneylife My VIEW: It is comforting to know that a healthy debate is on, about the Indian tax system. The ‘Take as it comes’ approach to revenue(read taxes) and ‘Pay as you go’ approach to expenditure which is a legacy of the pre-independence governments need a quick re-visit. Though government finances cannot be compared to accounts of banks or companies, if the arrogance of ownership settles down in the mind as a ‘right to do anything, come what may’, we may not need an astrologer to predict doom. Escape routes are many to compensate for the dwindling savings rates. If trust is restored, the accumulated wealth in the form of gold and jewellery as also hidden savings in the form of unaccounted money and ‘undervalued’ assets will surface which will be available for investment. The short-term measures like dipping into the reserves of central bank and selling ‘family jewels’ for meeting fancy targets of modern economic planning

Kamadenu: Mahakali. #Deviseries : Mahakali. #Deviseries Go to the link... Keshav moves with the SEASON... M G Warrier

Supreme Court Bench order on National Judicial Appointments Commission Act: An assertion of  primacy - The Hindu My VIEW: While respecting the Apex Court views and conceding that this space cannot do justice to any discussion on the 1000-page judgement, one is tempted to make an ‘appeal’ to GOI not to contest the grounds relied upon by the court in reaching at the decision just because it causes administrative inconvenience. Instead, government should dispassionately consider what kind of changes in approach to selection procedure for filling top positions, not only in judiciary, but across institutions, will improve governance and administration of justice. The change in approach should factor in the need to professionalise institutions. Top level appointments have an important role to play in the smooth and successful functioning of government and organisations both in public and private sector. Government should avoid direct involvement in selection of candidates for a

WEEKEND LIGHTER Intimation: I have seen the responses to the intro to my autobiography which was posted here last week. I understand, it was too early to venture this story. Mg has advised me, not to continue with the story for now. I honour his wish. Will come back and tell the full story, sometime later. Till then, Bye and take care. Without regrets BRAC VIJAYADASHAMI, 2015 This Friday, October 23 VIJAYADASHAMI will be celebrated all over India. In Kerala it is VIDYAARAMBHAM DAY. Granthapooja(Aayudhapooja for some) starts on DURGAASHTAMI(coming Tuesday), next day MAHAANAVAMI is spent in Pooja and prayers and on VIJAYADASHAMI, after prayers, VIDYAARAMBHAM is done. As children, even before reading the first letters from some ‘holy’ book, we used to recite the following stanza: HARI: SHREE GANAPATHAYE NAMAH AVIGHNAMASTHU SHREEGURUBHYO NAMAH GAJAANANAM GANAPATHIM GUNAANAAM AALAYAM PARAM THAM DEVAM GIRIJAASOONUM VANDEHAMAMARAARCHITHAM SARASWATHI NAMASTHUBHYAM

Nobel Economics Prize winner Angus Deaton: A Nobel for the idea of well-being - The Hindu My VIEW: Excerpt from the article: "Advocate for a greater state role Apart from claims of statistical or epistemic superiority, Deaton has questioned the divorce between policymaking and public discussion. His contribution has not only been as a rigorous economist, but equally as a public intellectual. He is a firm supporter of government action for social policy. Without being blind to the problems of governments in poorer countries, he forcefully argues for their greater accountability. “The absence of state capacity — that is, of the services and protections that people in rich countries take for granted — is one of the major causes of poverty and deprivation around the world. Without effective states working with active and involved citizens, there is little chance for the growth that is needed to abolish global poverty,” he argued. On the consequences of inequality, while some inequ

Rebooting roads | Business Line The Hindu Business Line, October 17, 2015 Letters Fiscal imprudence This refers to SS Tarapore’s article “The exchequer is not a cookie jar” (October 16). The need for a prudent ‘Asset Liability Management’ approach in handling government finances is excellently brought out. The ‘take as it comes’ approach to revenue and ‘pay as you go’ approach to expenditure, which is a legacy of the pre-independence governments, needs a quick re-visit. If trust is restored, the accumulated wealth in the form of gold and jewellery as also hidden savings in the form of unaccounted money and ‘undervalued’ assets, will surface, which will be available for investment. Short-term measures like dipping into the reserves of central bank and selling ‘family jewels’ for meeting fancy targets of modern economic planning (showing a lower fiscal deficit) without ensuring corresponding reduction in debt or increase in productive assets can be suicidal, in the long ter

JOY OF LIVING Thank you, Google! This morning my laptop opens with an assortment of cakes, with candles on them. To check whose birthday it is, I click on a cake. The message reads: “HAPPY BIRTHDAY, GOVINDA!” Not convinced, I count the candles! Seven on the left side cake And a ‘single’ next to that! 7 an 1, Seventy-one! Great! A bunch of roses, and Thanks to Team Google And All my friends and well-wishers Whose blessings are with me! M G Warrier mgwarrier.blogspot.in

Kamadenu: Balatripurasundari. #Devifortoday #Mahalaya : Balatripurasundari.  # Devifortoday   # Mahalaya Do visit Keshav's Blog Kamadenu when free... You will love his pics M G Warrier

Justin Wolfers: Why Angus Deaton deserved the economics Nobel | Business Standard Column My VIEW: Writing about this year’s economics Nobel winner Angus Deaton, Justin Wolfers, professor at the University of Michigen makes the following observation about data: “…For too long, econometric analysis had proceeded as if data were simply handed down from a statistician-loving higher power. The reality is far uglier: Data are imperfect, surveys can be unrepresentative, people misreport, and attempts to recontact survey participants often fail. Deaton confronts these issues head-on, and he has taught economists  how to extract meaning from imperfect data.” (Read full article using the link above...) The quote is relevant not only in the context of the dilemma faced by planners, social scientists and regulators equally in understanding poverty and financial inclusion. Even the feedback given to Prime Minister Modi about the progress made in implementation of Pradhan Mantri Jan Dh

Decision awaited: will they, or won’t they? - The Hindu

The path to economic recovery - The Hindu My VIEW: In the short term, it would be possible to manage to a limited extent the ever-increasing budgetary needs by drawing from sources like 'dividends' from government owned bodies or disinvestment of stakes in PSUs. In the medium and long term, there may not be any substitute for generating 'real' new resources.  M G Warrier, Mumbai

Financial Scene: Sense and sensitivity behind rate cut - The Hindu My VIEW: The article voices the concerns of small savers who provide resources to banks for business. I quote: "Have the silent savers got back their voice? Post policy, this statement sounds hollow. The RBI Governor had, on the contrary, justified the cuts, being the outcome of falling inflation as being beneficial to the common man including senior citizens and others who are worst hit. His argument that lower inflation can lead to higher real return might be technically correct but will not be appreciated by the common man who does not see any decline in the household budget year after year. Inflation expectations are still high and it should be beyond the comprehension of the common man to understand real and nominal return." Last week, I had commented on the issues covered here. Read full article... M G Warrier

Let’s not make the same mistake again | Business Line My VIEW: October 12, 2015 MP’s upskilling talk This refers to the article “Let’s not make the same mistake again”(October 12) by Konda Visheshwar Reddy, MP from Telengana. Reddy has packaged into the short article several issues concerning skill development. What stands out is the concern of the writer for the millions of young skilled workers  in India, who did not make to IITs or ITIs (Industrial Training Institutes) and still are contributing to the nation’s growth in a big way, but remains a neglected category when it comes to remuneration and social security aspects. It is comforting to find that people’s representatives are aware of the ground level problems faced by workers and are willing to share their thoughts in the media like this. Such sharing of thoughts by them will improve awareness among stakeholders and policy makers and help India find solutions to problems the country is facing much faster. A menti

Lighter in the dark* Sunday, October 11, 2015 AUTOBOIGRAPHY OF BRAC I I Introductory My name is “Banking, Reforms & Corruption: Development Issues in 21 st Century India” You can call me, BRAC The name my author gave me first was: “Surmounting The Insurmountable” Later in life, I found out: He was right! My author, M G Warrier, let us call him Mg for brevity, Claims he is ‘former general manager in RBI and Nowadays, he wants to be known as my author also! This morning, he showed me a mail Which said, so far, I had not impressed buyers much Though I am proudly aware, That many know me by face! On the best-seller list of amazon My number recently was in six digits! Mg has my cover as his profile pic,  on Facebook page, His articles which are read by thousands End with a bye-line introducing me. Mg is member of several social groups And I am introduced to every member! (To be continued…) *This post which will appear here durin

Letters: Base rate basics | Business Standard Letters Business Standard, October 9, 2015 Letters Base rate basics A V Rajwade's column, "Monetary transmission, base rates and ALM" (October 8), helps us look for reasons beyond the earlier adamant approach of the  Reserve bank of India ( RBI) in managing base rates. Bad asset-liability managing non-performing assets (NPA), inefficiency infused by bad human resource policies and government interference in the conduct of banking business contribute to the inability of banks to reduce interest rates on loans. It is common knowledge that net interest margins in India are much higher than those in some other countries. Till the RBI obliged by reducing base rates by 50 basis points on September 29, the blame for high credit cost was put squarely on the monetary policy. Earlier too, stakeholders and analysts were aware that banks were not lending out of funds provided by the RBI at bank rate. The twist came when the fi

Basics first | Business Line The Hindu Business Line, October 9, 2015 Letters Tort liability This refers to ‘Centre’s delay in approving pension updation scheme irks RBI retirees’ by Vinson Kurian (October 8). Although all financial transactions have a cost, if there is delay in completion in the case of payment of pension, the tort liability on the establishment stands out. This is because, if the beneficiary dies before receiving the benefit, the purpose of paying pension which is meant for the sustenance of the individual post-retirement, is lost. Every year the pension fund corpus is augmented taking into account the additional provisions needed on account of periodic revisions. The institution transfers huge surpluses to the government. The earlier revisions till 1997 are valid. The demand of the present retirees is genuine. MG Warrier Mumbai Where is the autonomy? This refers to the news item, ‘Centre’s delay in approving pension updation scheme irks RBI retirees’