By Anirudh Singla
In India, the traditional route to a glinting job package involves a back-story of dedicated students making it to premier institutes such as an IIT or perhaps the BITS Pilani and succumbing to the gleaming success stories of MBA graduates. Traversing their journey through IIMs or ISB (Indian School of Business), the traditional outset of a 9–5 job at the most competitive of workplaces begins for them.
After finishing his three year term, the University of Chicago professor passed on the baton to Dr. Urjit Patel (right) as the Governor of the RBI in September 2016 | Photo Courtesy: The WireThe road not taken
Former RBI Governor Raghuram Rajan also followed this path. However, he may have followed the same ‘path’, but not the same ideology. The ‘James Bond’ of Indian business had convinced himself that working to mainly earn money doesn’t give him the same adrenaline rush as working ‘for people’ does. With an ambitious furor, Mr. Rajan scaled heights, never looking down except to admire, how far he had come.
[su_pullquote align=”right”]His broad-based policies very affluently molded the three-year term into fruitful economic turn-outs for the country.[/su_pullquote]
A celebrated author and brilliant academic, even critics would have to suffice with no astute negation towards his policies as the RBI Governor. His broad-based policies very affluently molded the three-year term into fruitful economic turn-outs for the country. Increase in foreign capital inflow from $249 billion to $359.76 billion as of April, 2016 is a testament to that.
An unforgettable performance
On his birthday, let’s take a look at a fruitful agglomeration of successful policies he laid a foundation for:
First, he must be admired for cleaning up the bank balance sheets. Indian banks had been sitting on a heap of undisclosed loans that have a lot of negative implications. The second half of fiscal 2016 saw a tremendous change in outlook. Non-Performing Assets (NPAs) were assigned to visibly stressed assets by the Indian Banks under stringent policy positioning.
[su_pullquote]Two universal banks and eleven payment banks were approved benefitting over half a billion citizens.[/su_pullquote]
Next, he ensured basic banking facilities. Like availing a basic human right, Rajan brought under his ambit the availing of basic banking facilities. Two universal banks and eleven payment banks were approved benefitting over half a billion citizens. The ideas of wholesale banks and custodian banks were also steered by him on the main track.
He also played a major role when it came to bank licensing. IDFC Bank and Bandhan Bank found themselves being projected as the fresh wave of universal banks being licensed. The concept of payment banks was also approved in lieu of the increased outreach of monetary benefits and financial services in the Indian hinterlands.
Market development was another such accomplishment. Pervading liquidity by the introduction of the term – ‘Repo Operations’ was done by Rajan to elucidate his seriousness towards market development. By inching towards developing an extrapolated yield curve—the term repo, which were conducted for different periods such as 7 days and 14 days, led to a better-monetized pricing.
A hero in disguise
It is evident that the Government and Raghuram Rajan were not in tandem on policy decisions every time.
Yet, the latter through repeated assurances in forms of beneficial policies, always delivered. His second term would have been a boon to India’s Finance Ministry’s operations. Moreover, post the demonetization drive, his capable and sturdy hands would have softened the hard-hitting impact.
“I am no bond. But a banker on a move,” he had said once. This is just to tell you, Sir—like a bond is an instrument of indebtedness of the bond-issuer towards the holder, the Indian populace will always remain grateful, in response to being indebted towards your thoughts and the changes you brought to the Indian economy.
Featured Image Source: Newsweek
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