Mint Street headquarters of Reserve Bank of India in Mumbai underwent upheavals of not less than 8.0 on Richter Scale prompting two dapper, Ivy League educated Governors para-dropped by UPA regimes to impose an incomprehensible agenda down the nation’s throat, quitting on sombre notes. Second one was a bit interestingly mysterious because only just before that, one nationalist was appointed to the Board as Director and he had begun questioning them on their policies resembling agenda of Breaking-India forces. Honestly speaking, I enjoyed their quitting stewardship of the Central Bank huffing and puffing, then cooling down a bit to write books narrating their sob-stories launched by their respective ‘Godfathers’ and lustily cheered by their bosom-buddies. And I cheered the nationalist who skillfully engineered all serial episodes. Ostensible dispute arose over BASEL III and IFRS norms, produced abroad and designed for themselves, which these Governors and before, desired to impose upon Bharatiya Reserve Bank because their Ivy League Professors had taught them, those were the best norms, ‘universal’ in nature and must be accepted not only by all countries but also every human habitation on other Planets too while declaring very smartly on paper, those norms were only optional.
BASEL III is a global, voluntary regulatory framework on capital adequacy of banks, stress-testing and liquidity risks. It was formulated to ward off crises like 2007-08 by augmenting liquidity and reducing leverage, with enforcement extended upto March 31, 2019. International Financial Reporting Standards (IFRS) are issued by International Accounting Standards Board (IASB) to extend a common global accounting language to understand and compare corporate business across international boundaries specially for multi-national companies.
Now, the question that may singe many rises, whether these have been customised to accommodate our requirements and economic/market conditions prevailing in the country. Western markets are fiercely profit oriented, may indulge in anything fair or foul to maximise profits, then move around the world with deep pockets to manipulate and interfere in internal affairs of other countries, create wars to promote arms race or even stridently pursue evangelical agenda. Their economies are entirely stock-market driven and they are congenitally susceptible to fatal financial ups and downs. On the contrary, Bharatiya economy is exceedingly savings oriented, highly stable, bank driven with policies guided by the mantra of ‘Sabkaa Saath, Sabkaa Vikaas’. Secondly, BASEL III norms are formulated essentially for commercial banks while Bharatiya banks are mostly universal in nature. Only a few large banks may be able to absorb rigours of BASEL III norms albeit at the risk of immobilising precious resources while smaller ones may simply totter for sometime before crumbling to death. Similarly, IFRS norms too are extremely demanding in terms of capital adequacy that is not affordable in a rapidly growing economy like our’s with burgeoning credit requirement. These excessively stringent norms, quite redundant too, will squeeze banks to partially liquidate themselves to honour those stringent norms, concede huge banking space to foreign banks/ funds pushing the country towards financial colonisation.
Priority of western economies is stability as they are already grown up with their per-capita income almost 15 times more than our’s. BASEL III norms, IFRS, Monetary policies are the concepts focused on economies whose only priority is stability. Bharatiya economy is growing, yet to grow a lot hence, priority is growth and not stability. It is yet another reality that consistent growth ensures stability of a different order. With this priority of growth, BASEL III norm/IFRS etc. automatically turn redundant, rather suicidal. Secondly, those two Governors were obstinately imposing norms even stricter than prescribed norms which on paper, happen to be optional. MSMEs are highest employment creators and they were being denied credit due to most of banks falling under preventive norms with Congress Party simultaneously raising their decibel level over unemployment ratios. In spite of very low inflation, these two Governors stubbornly declined to reduce interest rates thereby, almost strangulating entrepreneurship and growth. Huge reserves of JanDhan Yojana and Demonetisation were lying idle as commercial banks were prevented from deploying those reserves productively. NBFCs too, found themselves in the same boat of fatal constraints and restrictions. Then Reserve Bank of Congress was bent upon holding reserves to the tune of Rs. 9 lakh crore. Nowhere in the world a Central Bank holds so huge cash reserves just for nothing. In the name of autonomy, two Governors were just ignoring economy’s well-being superciliously. Western orientation did not allow them to perceive, autonomy does not at all mean they enjoyed prerogative of the liberty of reporting to ISI of Pakistan.
The Congress driven by the Royal Dynasty, was raised by a British foreigner, always followed western oriented thoughts and policies, now is again headed by a European foreigner. They have a flair of inviting educated and influenced overseas key decision takers who have no inkling of socio-economic conditions in the country, impose those policies upon the country only because they believe, they alone are right and enjoy the coveted privilege to be always right. Coupled with large-scale plunder of nation’s wealth, that happens to be the main reason why country languishes in poverty, farmers in extreme distress and youth going astray for want of jobs even after seven decades post-1947. And smart leaders of the Party led by the Dynasty, declared the country a developing nation as ‘poor’ country sounds a bit obnoxious after so many years of their remaining in power.
Exit of those two Governors was excessively criticised by the Congress as it was executed by a nationalistic Government ignoring the fact that their first Prime Minister JL Nehru himself ordered a Governor to resign. Then Rajiv Gandhi kicked out Amitava Ghosh in just 20 days after his appointment and the last one being S. Venkitramanan by Finance Minister Manmohan Singh as he wanted his favourite C. Rangarajan as Governor. Nachiket Mor, recently sacked as Director of the central bank by Prime Minister Modi was Director of Bill & Melinda Gates Foundation too, concurrently implying thereby, regulator and the regulated 2-in-1. The Congress has been treating Reserve Bank Governors as PWD clerks and now they howl and yell when a well-meaning Prime Minister removes Governors with dubious agenda, brings in another one to strike harmony and coherence with Mint Street to accelerate growth agenda. It explicitly proves for the Royal Dynasty of Congress Party, Reserve Bank is yet another caucus / coterie as they lead the gang of Breaking-Bharata agenda brazenly.
New Governor has been installed with the Congress raising ruckus all over as usual. We hope, astute politician and an ardent nationalist in Prime Minister Modi has selected a right person as Governor who may bring about a paradigm shift in functioning of the institution. Monolithic structure may now come out of its arrogant existence and engage themselves in national reconstruction. He will also have to address the issue of ownership of home-grown banks from foreign onslaughts. Thus, one more institution has been brought around Government’s nationalist agenda of growth and prosperity.