Wednesday, 4 September, 2013

Welcome, Raghuram Rajan!

Raghuram Rajan takes over as RBI Governor

Raghuram Rajan has just taken charge as the latest RBI Governor.

As he's mentioned in his first press conference, he's taking over at a rather challenging time.

He's made a whole lot of "right noises" and "action-oriented announcements" addressing areas pertaining to:

  • New Bank Licences (Committee headed by Bimal Jalan, ex-RBI Governor to give recommendations)
  • NPA problem (to be analysed by group headed by Dy Governor KV Chakraborty) - He categorically says that "Promoters don't have a divine right to remain in charge"
  • Financial Inclusion (Initiatives to be suggested by panel headed by Nachiket Mor, a rare banker with a large human heart of Gold who gave up a surefire successful banking career at ICICI to get involved in social service)
  • Liberalising Bank Branch Expansion
  • Encouraging Foreign Banks to form subsidiaries (rather than remain branches of their global owners) - This will certainly enable RBI to have a better degree of control over possibilities of Systemic Risks
  • Mobilising NRI Deposits
  • Transparency (Well, his first press conference shows his intentions rather transparently!)
  • Team Spirit - He's categorically made it clear that all his announcements are NOT his own ideas but a combined result of team work by his able team at RBI -This obviously ensures that he will start with an advantage of his team being open to working with him rather than "against him". Likewise, he's talked about cooperating with other agencies like the SEBI and Government of India to hasten efforts at liberalisation of our markets
  • Using Technology (Spoke about panel to study mobile payment mechanisms, for instance)

WOW! That's a rather long list (and only a partial one based on my own memory) for a first day show! Hats off to the new RBI Boss. We're in safe hands, I must say.

Towards the end, Raghuram Rajan summed up things beautifully with these words:

"Change is risky, but not changing is riskier!" 

He's off to a great start. As the old adage goes, "Well-begun is half the battle won". Now, we'll wait for actual action. We're in for interesting times...

Watch this space!



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