For the last few weeks, intense debate has ensued on whether the RBI Governor, Mr Raghuram Rajan should get a second term or not.
The media has been batting for an extension of Mr Rajan’s tenure as if he is a Messiah for the Indian future and without him the economy is doomed. They however seem to be reacting more to the fact that Dr Subramanya Swamy has been in the camp that has an opinion that Mr Rajan need not get an extended term.
Dr Swamy has his reasons both economic and others. The way the media anchors of all major English channels are reacting, it is clear that they are trying to build the case for extension as if it is a PR campaign.
Fortunately, Mr Jaitely, Mr Modi or Mr Amit Shah have not given enough ammunition for the media anchors to make it a BJP vs Rajan issue and it remains a Swamy Vs Rajan issue.
Naavi.org has also been commenting on the role of the Governor of RBI not from the point of view of his contribution to control inflation but his failure not to address the issue of “Security for Depositors”, arising out of insecure banking practices, information security oriented risks and Cyber Frauds. The media has not however made any comment on the failures of RBI on this Cyber Fraud prevention front.
Naavi.org did point out on occasions that Mr Rajan has been obsessed with his role as an “Economist” and has not fulfilled his role as “A Regulator of the Indian Banking System”. It was as if he was suffering from a “Role Set” and could not see beyond the interest rate regime, the CRR/SLR regime and lately the NPA regime. All these are fine. But they cannot be the only objectives of the institution of RBI.
Let’s now see some of the areas on which media should research and provide us information on the following:
During the last few years there has been serious issues of farmer’s debt leading to many suicides and also creating a political backlash on the Modi Government.
Did Rajan undertake any steps to improve rural debt system to ease the difficulties of the farmers? ..No.
Has Mr Rajan ever commented on the raising retail prices due to hoarding of essential commodities by select wholesalers and how RBI could help in controlling the same? ..No
Has Mr Rajan ever espoused the cause of Small and Medium industries who are unable to meet the growing import competition from China?
Has he ever made any policy tinkering to support the “Make in India” campaign which the Government wants to push hard? …No
As regards Cyber Frauds,
Has Mr Rajan ever even recognized the growing problems which small banking customers are facing because of Mobile and Internet Frauds?
Has he ever commented on how Banks have been unfairly treating the fraud victims dragging them to Courts and enjoying the fruits of the Bank’s negligence?
Has he responded to the repeated requests from the undersigned that “Cyber Insurance” should be made mandatory for Banks at least as a part of the new Bank licensing process?
Has Mr Rajan taken action against Banks for their failure to follow KYC causing frauds of various types including cloning f Cards, Cloning of Cheques, Phishing etc…..
Answers to all these are No, No and No.
Mr Raghuram Rajan has thrust Core Banking on all Urban Cooperative Banks and allowed Social Media Banking in a few Banks without appreciating that these Banks are unprepared for the leap in technology.
All these failures have resulted in the Risk of technology Banking being unfairly hoisted on poor customers of Banks. It was only during the last one month that a “Cyber Security Subsidiary” has been spoken of. We are yet to see how this project takes off during the next term of the next Governor, who ever he is.
I therefore demand the Media anchors including the anchors of CNN IBN, NDTV, India Today, Times Now etc try to evaluate the performance of Mr Rajan more comprehensively than what they are doing now.
Dr Swamy has not only pointed out the failure of Mr Rajan in bringing down interest rates which Dr Swamy feels could have stimulated the economy and helped in achieving a higher growth, but also indicated that Mr Rajan tried to help Mr Karti Chidambaram by leaking some information from ED.
If Dr Swamy makes such an allegation, it cannot be brushed aside since Dr Swamy is not a Kejriwal. Dr Swamy is methodical and when he makes an allegation, he knows that he needs to back up with prima facie evidence and most of the times, single handedly takes it to its logical conclusion in Courts. So, I would not make the mistake of ignoring his accusations.
During many occasions in the past, Mr Rajan has given an impression that he is against the policies of the current Government. Though we can accept part of it as a positive aspect of the Governor being independent, the possibility of him trying to discredit the current Government as Dr Swamy suspects, cannot be ruled out.
Under the circumstances, extending his term by another three years could be considered as a “Risk” by the current Government.
While the media may continue to debate and try to create a favourable opinion to get him an extension, and Mr Rajan may also try to make a last minute effort to drop the interest by 0.5 % in the next policy due in a couple of days, Modi Government should find out a good substitute and give a happy farewell to Mr Rajan.
This would be good for both the Government and Mr Rajan himself since any further disclosures from Dr Swamy may embarass everybody. I am sure that Dr Swamy would not escalate the issue if Government decides to replace Mr Rajan at the end of his term instead of taking any action now.