The pros and cons of Raghuram Rajan - Should he be sacked? - An Ethmos perspective

There is a debate going on around the country regarding the replacement of Raghuram Rajan with our Terminator Subramaniam Swamy writing to the FM regarding his termination of service.  We are no appointment experts, however, we would just like to highlight the achievements and failures of our celebrity RBI governor.  So, being good old optimistic fellows, we would go for the positive ones first:-






1.  Raghuram Rajan tried his level best to reduce inflation by regulating the money flow in the banking system through the rate of interests offered by RBI to the banks, namely repo, base, and reverse repo rates.  If today you are getting your home, car, education, and business loans at lower rate of interests, then he is the man behind it, at least to a very large extent.
2.  He is a non-partisan thorough professional who does not have any political inclinations.  He was appointed by the then UPA government but this was one decision where we won't question the previous government unlike the myriad of scams that it committed since RR was a highly respected personality in the field of finance.
3.  He is the man behind the opening of small payment banks in our country through which you can do money transfer from service providers like Airtel, Vodafone, etc.  He pioneered these concepts in our country which were already in use in foreign countries since a long time.

Now let's be a little bad and find his shortcomings because after all he is just a mere mortal.

1.  Some of the policies of RBI like discarding the old-fashioned (but well meaning and very useful) systems in the banking sector like disposing of confidential bank reports while sanctioning loans and heavy reliance on credit information companies (CICs) for getting the track record of the borrower has done more damage than good.  All this was done in the name of "better customer service" in order to avoid nuisance to genuine loan seekers but this has led to unscrupulous elements entering into the credit system of the banking sector since the CICs are no gospels of track record of any person and nothing beats the personal interaction and inspection of human banking official while sanctioning of loans.  Moreover, he did a blanket implementation of this scheme unknowing of the fact that in the rural heartland of Bharat, the CICs don't have much penetration and many defaulters are not captured in their database.  This is one of the reasons for the high NPA today in our banking system and the subsequent coming of loss of major banks.
2.  In the hurry to decrease inflation by decreasing rate of interests, RR introduced a new system of calculating rate of interest with effect from 1st April 2016 called the Marginal Cost of Funds based Lending Rate or the MCLR.  (Here is an article explaining the nuances of the same).  This system of calculating rate of interest, as per our view, will result in a huge dent in the profitability of the banks since the margins kept by the banks for providing loans are really thin and it becomes really difficult to even cover up operational costs of the banks.
3.  The third and last point is that he is not a "field" man and rather a "board room" man.  We do agree that he is a knowledgeable man (who is even rumored to be the next Noble prize winner for Economics in the near future), but in order to control the Bharatiya banking industry what is required is the ground level knowledge, the "nukkad ki baat" kind of acumen in dealing with credit decisions, and even bigger decisions.  A small error that he committed was to equate our semi-baked urban economy to the developed urban economies of the west without considering the fact that nearly 60% of our economy comes from the semi-urban and rural areas.  Just forcing banks to open branches in such areas will not help unless background changes in recovery laws (of course, it is not fully in his hands) is brought forth and banking policies aligned with the local economies.  A small example is the scale of finance based financing of agriculture sector which has led to over-financing for some farmers and gross under-financing for some.  Not to mention, the tonnes of restructured agriculture and business loans are going to be dead bodies in the cup-board which will be falling off the shelf anytime soon.

So our take - if at all you retain RR, tell him take a Bharat bhraman and understand our local culture and economy for framing new policies and tell RR to make his junior officers also do the same.  It won't hurt if RBI officials are also given a mandatory rural/semi-urban assignments for understanding our country in a better fashion.  And in case you terminate his services, make sure you find another man with a heart of gold like him.

Happy Ethmos to All!

The Owasis and Presstitutes of Bharat are very right - Bharat Sarakar can DO NOTHING regarding ANYTHING - An Ethmos view

Recently a supposed 29-year-old (really really old for a student!) scholar of JNU, Shri. Shri. Kanhayya Kumar, was arrested on charges of sedition (warring against the state) by the Government for giving and supporting hate speeches inside the JNU campus.  Thanks to our great bulky constitution, he got released on bail without much problem by giving a surety and fake assurance which he has broken multiple times (and nobody cares now anyways) since his release.  And the best part - nothing happened.

Way back in 2012, another political person from the erstwhile Andhra Pradesh, Mr. Akbaruddin Owaisi, made an acerbic venomous speech against the government, the Hindus (of course, that is not at all an issue since we are a "sickular" country where killing, abusing, raping, and harassing the peace-loving majority population is taken for granted and there are intellectuals, unfortunately Hindus, who support them also) - and he was also arrested on the same charges and granted bail by giving a surety and a bond of a mere Rs. 10,000/-.  Bingo! You are free to hate, kill, incite to kill, murder, rape, and do whatever you want since Bharat is a Jamuriat (democracy and that too, a secular one - whoa!).  May be we are the only country in the world where we have face more enemies from the inside rather than outside and being Hindus ourselves, we dread the day when there will be mass murdering or extermination of our race and culture as has been happening over the past more than 2000 years.

We hope you all would have heard about the bird called Dodo which was found in abundance in the islands of Mauritius once before it became extinct.  Any ideas, why it got extinct?  It got extinct because of its jolly and innocent trustworthy friendly nature.  When humans inhabited the islands, the Dodo was so friendly to the new found "human friends" that it never tried to escape even when it was captured and killed for food by the humans.  The killings continued till the Dodo became an extinct animal and there are none left in the world as of now.  The death of Dodos gave new metaphors in the Oxford dictionary namely "as dead as a Dodo" and "as dumb as a Dodo".  We seriously fear that one day the word "Hindu" may be substituted by "Dodo."

We feel proud of being a boiling pot of a mixture of cultures and religions.  And that is indeed a matter of pride that so many cultures, creeds, and religions co-exist in this small portion of land that we call Bharat and that the actual natives of this land never ever invaded or attacked anybody for the purpose of destroying "their" religion and "propagating" ours.  Reason - Hinduism is not a religion but a way of life which is why it is called the Sanatan Dharama or the eternal truth.

Coming back to our topic, we very deplorably frighteningly say that the likes of Owaisis, Zaid Hamids, Umar Khalids, and Kanhayya Kumars are and WILL flourish in our land and one day they MIGHT succeed in destroying us.  We know that the prediction that we are making is very dark and hopeless but then keeping the eyes closed and thinking that it is night is foolishness.  Better be true to ourselves and accept the challenge rather than stay in an Utopian world where we think everything as hunky dory.

The recent killings of a HINDU DELHI DOCTOR, Shri. Pankaj Narang (we are sure you would have forgotten him by now!) is also a straw in the hay in the grand scheme of things that are happening around in the country.  The indications are very subtle and not noticeable unless a responsible media does its job with sincerity which is not at all happening in our country.  Here the media houses are owned or have some or the other allegiance to the "first family" of our country and never ever report anything that hampers the vote banks of the party supported by this family.  The most negative yet important of the news is reported in a manner that makes it neutral and unassuming in importance for the general public.  And any news, even a "no-news item" like the comparison of ATTAPADI DISTRICT in Kerala to Somalia by our Prime Minister (which was indeed an apt comparison since the HDI figures are actually similar to Somalia, which has been reported multiple times much much before Modi's speech) will be reported in such a scandalizing venomous hoodwinking manner that people are convinced to believe that Modi insulted "Kerala" by comparing it Somalia.

May be this is the reason why today's press has lost its credibility and are correctly referred to as "presstitutes" in the social media circle.  But then again what can WE do?  As of now nothing more than shouting at them on the internet like we are doing right now.  But what the government can do?  If it is willing to do, then it should enact the Press Reporting, Regulation, and Control Act which we will highlight in our forthcoming articles.

Till then,

Happy Ethmos to All