India's Decade of Reforms: Reserve Bank of India at Central Stage

WL: India’s Decade of Reforms
(March 3, 2018)

Chasing Inclusive Growth : See Section III

I

Book release

INDIA’S DECADE OF REFORMS

RESERVE BANK OF INDIA AT CENTRAL STAGE

M G WARRIER

Publisher: Notion Press, Pages: 258, Price: Rs399
Kindle Edition: Rs200

Notion Press has published my second book “India’s Decade of Reforms: Reserve Bank of India at Central Stage on January 30, 2018. The book is available in print edition (Paperback) and in eBook version at all major online distributors worldwide, including Amazon.in, Amazon.com, Flipkart, Ideakart etc besides with the publisher Notion Press, Chennai.

M G Warrier

II

Recent responses

Privatizing public sector

Apropos Akash Prakash’s thought-provoking piece “PNB and the public sector banks” (Business Standard, February 27), let us concede that in India, since Nehruvian days, when ‘public sector’ commanded some respect, there has been a sponsored lobby out to annihilate public sector undertakings by any means available. We have witnessed the fall of institutions like UTI.
 Methods used included creating legal hurdles in parity in functional matters with the private sector, ensuring weaknesses in top management by interference in top-level appointments and HR issues using Government’s ownership rights and sometimes by allowing infiltration of people of doubtful integrity at higher levels.
As regards banking in India, as the source of funds and the clientele served by the public sector and private sector banks are the same, there should not have been much difficulty in providing a level playing field for both categories of banks.
But, in reality,  we find only the private sector banks get full freedom to do business on their own terms (choice of clientele, freedom to operate where they want, no interference in HR-related matters including top-level remunerations and so on). Public sector banks are made answerable to their masters in Finance Ministry, accept responsibility for providing credit for all government-sponsored programmes and ensure G Secs are fully subscribed whenever central and state governments enter the market. Of course in making government borrowings successful they have other public sector organizations like LIC which are expected to support the government on an ongoing basis.
Privatization. Are we talking about handing over the banks to Mallyas and Modis who are running away with banks’ funds? Or are we aiming at professionalization of Indian Banking System, irrespective of ownership? These are choices to make fast. Time is running out.
M G Warrier, Mumbai

Owner and regulator

This refers to the report “Check for fraud in NPAs above Rs 500 mn: Govt” (BS, February 28). On the face of it there is nothing extraordinary in ‘owner’ of a business giving operational instructions to the staff working under him. GOI as owner, has the responsibility to ensure smooth functioning of PSBs and the recent developments have shaken the public trust in PSBs, which need to be restored quickly.
But in the given situation, the divergent instructions flowing from GOI and RBI will confuse the already strained managements of PSBs. More likely, they will start waiting for instructions from North Block even after getting operational or supervision-related instructions from RBI, as it is the Finance Ministry which decides the fate of the top management in PSBs.
This is an embarrassing situation for the country’s central bank which  shoulders the responsibility of working under the RBI Act and administering Banking Regulation as legally mandated under the Banking Regulation Act,1949.
If GOI is not comfortable with the speed with which instructions are percolating down to banks from RBI, they should have a dialogue between them (GOI and RBI) and sort out issues. It is not in public interest for the two being seen talking differently and GOI sharing concerns in the media even before taking the banking regulator into confidence. Owner and Regulator have different kinds of responsibilities. Earlier this is conceded, the better for the image of the Indian Financial System which is already sagging. If banking gets affected by ego-related issues, the fall will be total and there will not be any public sector-private sector divide.

M G Warrier, Mumbai


Owner-interference

This refers to the report “PSBs Given 15 Days to Prepare Action Plan to Address Risks” (ET, February 28). GOI as owner has the responsibility to ensure smooth functioning of PSBs. But, the dual control and divergent instructions flowing from GOI and RBI will confuse the already strained managements of PSBs. More likely, they will start waiting for instructions from North Block even after getting operational or supervision-related instructions from RBI.
This is an embarrassing situation for the country’s central bank shouldering the responsibility of working under the RBI Act and administering Banking Regulation as legally mandated under the Banking Regulation Act,1949.
If GOI is not comfortable with the speed with which instructions are percolating down to banks from RBI, they should have a dialogue between them (GOI and RBI) and sort out issues. It is not in public interest for the two being seen talking differently and GOI sharing concerns in the media even before taking the banking regulator into confidence. Owner and Regulator have different kinds of responsibilities.

M G WARRIER, Mumbai
III
Leisure
Chasing Inclusive Growth:

Reforms for Financial Inclusion
My first book “Banking, Reforms and Corruption: Development Issues in 21st Century India” is being published as eBook titled “Chasing Inclusive Growth: Reforms for Financial Inclusion” by Notion Press, Chennai this month.

Corruption: meaning

1.    dishonest or fraudulent conduct by those in power, typically involving bribery:
"the journalist who wants to expose corruption in high places"
synonyms: dishonesty · dishonest dealings · unscrupulousness · deceit · 
·         the action or effect of making someone or something morally depraved.
"the corruption of youth was a powerful motif" · 
synonyms: sin · sinfulness · ungodliness · unrighteousness · profanity · 
2.    the process by which a word or expression is changed from its original state to one regarded as erroneous or debased:
"a record of a word's corruption" · 
synonyms: alteration · falsification · doctoring · manipulation · manipulating · 
·         the process by which a computer database or program becomes debased by alteration or the introduction of errors.
"this procedure creates a temporary file to prevent accidental corruption"
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