In his last policy, Rajan puts onus on banks

In his last policy, Rajan puts onus on banks: RBI keeps rates unchanged; ensures adequate liquidity in the system...

RBI under Dr Rajan’s leadership

This refers to the report “In his last policy, Rajan puts onus on banks” (Business Standard, August 10). When Reserve Bank of India came out with the last Monetary Policy Statement during the current tenure of Dr Raghuram Rajan’s governorship, media and even most of the analysts and bankers were engaged in searching for Dr Rajan’s ‘last words’. They didn’t find any of them. The document did not look different in presentation and content from the previous ones during the last three years. There was a  difference, which went unnoticed.
One can ignore the allegations from Dr Subramanian Swamy that Raghuram Rajan did not study economics at undergraduate level. Dr Rajan effectively put into use the management lessons he picked up from IIMA and his international experience in monetary management, supplemented by the expertise in teaching what he learnt, from day one at Mint Road, with plans to remain active as Governor till September 4, 2016. His reference during his post-policy interaction with media on August 9 to the slew of measures affecting the financial sector to be announced on August 25, 2016 is proof enough to show that the coming weeks are not going to be spent in late night farewell parties by him or his colleagues in RBI.
The challenge Dr Rajan has thrown out to RBI by leading from the front is not small. He has demystified the central bank’s functioning and has changed the way in which the institutional system in the financial sector in India was functioning. The sector was playing a subservient role for which scripts were being written by corporate and political leadership, with implicit support from the babus in the North Block. RBI will definitely rise to the occasion and move forward.

G Warrier, Mumbai


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