Unless Dr Urjit Patel starts clearing the balance sheets of banks, the investment cycle will not start. Unless the clog in the drain is cleared, further lending cannot happen. If further lending doesn't happen, the investment cycle also will not happen, writes M R Venkatesh.
'When a soldier becomes a king, he better be a king. He should now just forget the past and move beyond continuity. He should catch the potential of India's moment and play a leader's role,' says Vallabh Bhansali of Enam Group.
Sir Osborne Smith was the first governor of the Reserve Bank, serving from April 1, 1935, to June 30, 1937.
PAC summons RBI Governor Urjit Patel, Finance Secretary Ashok Lavasa and Economic Affairs Secretary Shaktikanta Das.
The RBI was not party to the decision to demonetize 500 and 1,000-rupee notes, which was taken at the highest level of India's political leadership.
The days of anti-reform, anti-growth advisers that undermined our economy in the UPA-II years will now be strictly behind us: Bhagwati
'The finance minister has messed up the economy.'
The report said that "we believe, institutions are more important than individuals" and ultimately what is important is the credibility and the independence of any institution and nothing else.
November 8 marks 6 years after demonetisation. A K Bhattacharya reveals how the prime minister and the RBI worked together for months before Modi's 8 pm speech. A riveting excerpt from The Rise Of Goliath: Twelve Disruptions That Changed India.
Highly-placed sources in the government say that none of the senior ministers had any inkling of Patel's resignation
Governments that did not respect the central bank's independence would sooner or later incur the wrath of financial markets, ignite economic fire, and come to rue the day they undermined the regulatory institution, Deputy Governor Viral Acharya warned.
'If Urjit Patel had resigned after the five-state elections results people would have taken a different view. So this was the right time for him to resign.' 'He rightly resigned as he felt the differences with the government were not getting settled.'
'For the RBI, for a central bank, reputational risk is the worst risk.' 'Credibility is the worst risk,'
'Only the coming years will tell whether the government finds this an easy way of relieving itself from its fiscal constraints.'
'When there is no middle ground possible between the government and the governor, the governor has to go.'
While its deposits from Iran accounts have come down from a peak of around Rs 25,000 crore to Rs 2,200 crore, it's been offset by the bank receiving almost Rs 24,000 crore in deposits post note ban.
T C A Srinivasa-Raghavan recalls a tussle between the government and RBI when Rajiv Gandhi was prime minister and how it was resolved.
'The one sector where there is still a sense of crisis is banking, but the government has regrettably set its face against privatising any of the government-owned banks,' says T N Ninan.
'Those who come from outside are surprised at the relatively small strength of the RBI supervisory cadre, relative to the needs of the country and the needs of the financial sector.'
'It will be interesting to see how Dr Patel handles gadflies with the maturity of egregiously petulant three year olds.' 'That Dr Patel does not, in so far as we can tell, cause society matrons to gush like hormonal teenagers can only be a good thing for him.' 'Look where their febrile imaginations and breathless prose took his predecessor.'
Three key babus will make room for a new set of officers to carry the baton of Budget programmes.
'With 27 days to go, the total bank deposits has come tantalisingly close to the Rs 14 lakh crores of banned notes which was in the financial system on November 8.' 'Black money hoarders may have actually laundered their black money into white,' argues Rajeev Sharma.
'When I came here in 2002, I said you can grow at 8%.' 'And I was told that was crazy, and (now) here we are.'
The HR challenge seems to be one of the most important issues that RBI Governor Shaktikanta Das will have to tackle.
He said it will be 'foolhardy' to diminish institutions for short-term political gains.
'I suspect the recovery that the banks are going to get out of this IBC is not going to be more than 30 per cent.' 'If you leave the steel industry aside, the recovery rates are not looking very, very healthy,' Jairam Ramesh tells the Rajya Sabha.
'The time has come to incorporate Indian sociology into economic policy.' 'The first step in that direction would be to listen to economists trained in India and not just the US and the UK, argues T C A Srinivasa-Raghavan.
'The autonomy of essential institutions is clearly under question as the Modi government seeks to influence them politically.' 'The credibility of institutions such as the EC, the CBI, the CVC, the UPSC, the RBI, media, and universities, has been compromised,' notes Zoya Hasan, the distinguished political thinker.
'The Jalan Committee has now provided very clear guidelines on how the (RBI's) balance sheet should be looked at, what kind of disclosures should be made, what are the principles on which the Contingency Risk Buffer should be maintained, what should be the revaluation reserves, and the market risk to the Contingency Risk Buffer.'
'During the transition process, we have some control over the withdrawals.' 'In terms of your wealth, the money in your deposit account is where it is.'
'The critics are getting carried away.' 'The challenge for the RBI is not any erosion of autonomy caused by demonetisation.' 'It's the whole attempt to reduce the RBI's stature and role that has been under way,' says T T Ram Mohan.
'Who would want to be the man nominally in charge of driving the economy when your boss orders you to swerve it into a ditch of unknown depth?'
'Demonetisation demonstrates that this government is simply too amateurish in terms of economic policy-making to properly address India's deep, deep problems,' argues Mihir S Sharma.
'It is like bombing a building with 200 people to kill 5 terrorists.'
The trolls on Twitter, the rumour mongers on WhatsApp and the serial abusers on Facebook are the enemies of social media.
'I want the prime minister to be punished because he put our country in difficulties as he took this decision without Cabinet approval.' 'When he had already ordered the printing of new currency notes on May 19, 2016, why did he tell lies to the country?'
'Tilting at the Government in English in front of India may make him feel like Joan of Arc, but without a feel for Bharat he will merely be Don Quixote,' says S Muraleedharan, former managing director, BNP Paribas.
'We feel there is definitely something murky in the system.' 'Will anyone believe that Nirav Modi will go to a branch and bribe a low-level officer?' 'Just look at the people with whom he had moved around.'
'...Unless we muck up our policies.' 'We have to become a modernised economy.' 'Our institutions should be stronger. And that is most important.' 'The rule of law should prevail and contracts should be enforced.' 'Above all, we have to recognise the importance of globalisation.' 'It is in our favour at this stage. We should grow and become globally competitive.'
'When I met the prime minister on November 15 there was no RBI report with the prime minister as to why this was done.' 'When I asked the PMO officer about this, he said the RBI did not bring this to the PM and did it independently.' 'When I asked how could the RBI ban DCCBs from accepting deposits from farmers in old notes when the government gazette released on November 9 allowed them to do so, this officer told me that not even senior PMO officials had any idea about this RBI ban.'
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