Clever Banks Want Shield From CBI CVC And ACB

Bank officers are now demanding that decisions taken by them should not be under scrutiny of CBI or CVC . In other words they want that they should be provided shield from the actions of CBI or CVC or CVO or anti-corruption bureau. TO make it more clear , I may say that banks want unbridled freedom in taking decisions related to lending and that to write off or in arriving at compromise settlement with defaulting borrowers like King Mallya.

Bankers are raising this demand not for the first time, but in the past too they have put such demand before Ministry of Finance to get patronage from them so that their evil works are not subjected to scanning by any other agency. They want to cover up their evil acts by submitting a purchased certificate from team of Chartered Accountants and Rating Agencies.

It seems to me as ridiculous because record of last three four decades make it crystal clear that none of top officials of banks or PSU has been punished for their involvement in corruption. 

An individual , posted in any post from top to bottom in any office  is punished only when he or she is thorn in the eyes of his or her bosses. To make it more clear , a government employees is safe as long as he or she is flatterer to his bosses and blidly follow the instruction of  bosses  without verifying the fact that the instruction given are lawful or not, morally right or not. On the contrary if an officer starts saying spade a spade, he has to face consequences even for small lapses.

Based on  facts and figure related to cases related to corruption filed in the office of CBI , CVC, CVO , Anti Corruption Bureau or filed in court of law and then analysing their rate of disposal, time taken in disposing off such cases, reasons behind closure of such cases, pending cases in want of permission from government , it can safely be said that government has willfully kept these bodies weak and ineffective .

For this purpose it is well thought  stretegy of the government has always been  to keep these bodies disabled and provided with inadequate manpower and inadequate infrastructure. They have tactfully but wilfully weakened judicial system as also investigating agencies like CBI or CVC or other anti corruption agencies so that action against erring officers and politicians can be manipulated as per their whims and fancies.

In other words,  it will not be an exaggeration to say that administrative, investigative and judicial machinery all have collapsed in our country. Let us see what new governmemnt led by NDA do it to change the culture which has taken deep root during regime of past governments.

In my view there is wilful conspiracy to keep these bodies weak, ineffective and by building undue pressure of whimsical transfer and arbitrary rejection in promotion processes. Adequate staff are not provided to judiciary also so that  aggrieved employees cannot get justice even from court of law..

Inefficient , incapable , unskilled , untrained, unwilled and corrupt persons are mostly and wilfully provided to the valuable offices of CBI, Anti Corruption Bureau, Audit and Inspection department,Office of CAG, offices of CVC, offices of Chief vigilence Officers situated in various public sector undertakings so that none of cases pertaining to key figures can be decided in time .

Whenever it is found by powerful politicians that any judge or any CBI official or any Vigilance officers is likely to prove charges of corruption against their friends, relatives and their political colleagues, such officers are immediately transferred to some critical, sensitive and remote places.

Rich people use their money and muscle powers to torture investigating officials, witnesses and police officials to weaken the case or to ensure the closure of the case or to postpone the hearing for an indefinite period.

Can any government  stop such whimsical and arbitrary transfers and rejection in promotion processes.?

Can any government  ensure adequate staff at all Anti Corruption bodies ?

Can  government take the risk of providing  efficient , effective, honest, stern,capable, skilled and well trained person to important bodies like CBI, High Courts, Supreme Court, Lower Courts, CVC or existing Ombudsman or in proposed office of Lokpal or Lokayukta?

It is bitter truth that most of officials working as Vigilance officers in various Public Sector Undertakings, banks, insurance companies have totally failed to stop corruption in such offices.

Thousands of cases related to corruption of employees of the organisation remains pending for years in the offices of Internal Vigilance Officers built in all government offices and eventually corrupt officials are exonerated or allowed safe retirement or at most motivated to submit resignation letter to finally close the files related to corruption, fraud and cheating.

How can anyone dream of justice in such offices where even protectors are corrupt and damagers. Even vigilance officers , audit officers and inspecting officers are bribed to close the file or weaken the case or to keep the case pending on flimsy ground for decades.

PSU banks seek shield from CBI, CVC on loans

-Times of India 7th June 2016

State-run banks have sought immunity from "unnecessary oversight" from agencies such as the Central Bureau of Investigation and the Central Vigilance Commission on decisions related to loans that are taken collectively.

Bankers told TOIthat the issue has been flagged to the Bank Board Bureau (BBB) headed by former Comptroller and Auditor General Vinod Rai and also came up for discussion with finance minister Arun Jaitley on Monday in the context of settling loans on "commercial terms". "Gone are the days when one bank chairman could decide. We now follow a committee-driven approach where a group of people decide on every case. Subjecting bankers to unnecessary harassment, which often takes place after retirement, is impacting decisionmaking," a bank chief said. The latest move from banks comes against the backdrop of the high-profile case where former liquor baron Vijay Mallya has dues of close to Rs 9,000 crore and banks have mounted massive efforts to get the businessman to pay back. In the past, even top civil servants have expressed concern over the "unwarranted scrutiny" by the CBI and CVC, which they say hampers quicker decision making.

Typically, a decision is taken by a consortium of banks and is then endorsed by the respective boards. In recent years, the CBI has questioned the decision of even committees set up by banks which have taken commercial decisions, bankers said. "Which chairman will decide if your decisions are challenged regularly? We have suggested that the government speak to the agencies and sensitize them about the need to avoid unnecessary scrutiny in case of collective decisions," the bank CEO said. 

Link to News Published in Times of India on 7th of June 2016


Swamy Crosses Limit Against Rajan , Governor RBI
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Mr. Subramanium Swamy has alleged that the former IMF chief economist who is presently Governr of RBI , Mr Raghuram Rajan had planted "a time bomb" in the Indian financial system in the year 2013 that will explode in December 2016.

On May 26, Swamy had levelled six allegations against Rajan, Mr. Swamy has alleged that Rajan is sending confidential and sensitive financial information around the world, and hence Swamyhas asked the Prime Minister to sack him immediately.

Prior to that, Swamy had claimed that Rajan was "mentally not fully Indian" and alleged that he has "wilfully" wrecked the economy.

I do not at all endorse the style of Mr. Subramanium  Swamy criticisng and indirectly abusing Mr. Raghuram Rajan Governor RBI in public domain. After all , Mr Rajan holds a Costitutional , prestigious, powerful  and the most important post of the country so far as economics of the country and its management is concerned.

I am of strong opinion that none of politicians  should be allowed to criticise any public servant . Because officers working in any department of public sector undertaking has to discharge his duties without any fear of repercussion. And if every political leaders start targeting government officials as per their sweet will, it will create chaos in the administration and ultimately result in adverse impact on governance. Officers in such environment think it wiser and safer to please politicians than to discharge their duty honestly and sincerely.

Even small village level political leader , either of ruling or that of opposition parties tries his best  always to blackmail government servants or build  unwarranted and illegal  pressure on government servants  for allowing illegal favour to them  and for   serving   self interests of local politicians ,state level political masters or central leaders or their kith and kins or their friends and relatives   violating all existing laws and sacrificing the interest of the state and in total disregard to rules of morality.

This is one of the key reasons, why government officers spend crores of rupees from government treasury to extend red carpet welcome to ministers in particular and  politicians in general and also in distributing costly gifts to their political masters. In turn they earn crores of rupees from contractors, vendors and business houses and even from government servants in form of bribe for allowing illegal discounts and rebates and for allowing public servants to earn bribe in lieu of undue favour .

 Rather I would like to say that use of power of transferring an officer by politicians or in  recommending promotion or rejection of a government servant in annual processes carried out for promotions of public servants , has created , irrigated and promoted a culture of flattery and bribery in almost all offices including PSU banks. This evil culture is prevalent in all public sector banks and all PSUs. Workers find more interest in serving their bosses than in serving their organisation or their country. This evil culture has damaged the work culture in police departments and even in defence services.

AS soon as a new Chief Minister joins his duty in a state , he or she prepares a chain of transfers to accomodate officers and staff as per his  or her choice and to suit his or her political strategy. As a result of this dirty culture followed by almost all  political masters, officers instead of focussing on their work , have started focussing on how to please their political masters and how to oblige ministers and powerful persons so that evil acts of such corrupt officers are not put in question or even if questions are raised by media men or some agencies  , they may get full protection and acquitted from all charges of corruption and irregularity taken place in discharging their duties.. 

I have no doubt in saying that government officers are using political powers in general to brighten their career and to grow in their personal power and  wealth and during this course of ugly action , they totally sacrifice the interest of the organisation they serve and the government under which they work. This evil culture is mainly responsible for large scale corruption prevalent in govrnment departments, banks and insurance companies or in all pUblic sector enterprises. This evil culture has created a vicous cycle of flattery and bribery in which officers and politicians play mutual blame game but never own their own responsibility, frauds and failures.

I hereby make it clear that there may be valid points in what Mr. Subramanium Swamy says about Mr. Raghu Ram Rajan , Governor RBI. There may be merit in what Mr. Swamy has been alleging against Mr. Rajan. His all points must be verified and investigated by appropriate authorities. But there is well established procedure to place such information seeking action against accused officer or any government staff . There is provision for  giving sufficient opportunity to every accused to explain in his or her defense.

Mr. Swamy therefore is not justified in putting blame on Mr. Rajan in public domain and has got no right to malign image of a dignified and reputed person like Mr. Rajan . If Rajan is guilty of playing a foul game to cause loss to the country , he must be punished by following lawful procedure but he should in no case be humiliated in the manner in which Mr. Swamy is doing against Mr. Rajan.

If Mr. Swamy is not restrained from his unlawful action , other politicians will also be motivated to follow similar type of character assassination at all levels to mlaign image of any government servants whoever denies  to serve the ill-motivated politicians as per their whims and caprices. 

I know very well through my four decade long services , how even low level political worker exerts pressure on staff each banks, government offices and PSUs to ensure that his self interest is served without any hindrances and no one dares challenge unlawful demand of such corrupt political worker because everyone knows that they will not get protection from their superiors even if they are cent percent right in their approach.

And the most painful is that if such officer complains to any higher office or a police station or any regulator against wrong demands of such politicians , none of seniors or police officers will dare to come to the rescue and none of them will ever try to safeguard such officer from torture of corrupt politicians . 

This is why government officers has made a habit of blidly following the instruction of politicians even though such instructions are many times unlawful and damaging to the interest of the country. Even the policy of whistle blower has not convinced honest workers and also failed to create deterrent affect on  evil workers and politicians who have been engaged in  committing crime one after the other.

I therefore once again make an appeal to the government , specially to Mr. Narendra modi to restrain persons like Swamy in tarnishing the image of any officer. Please do not allow the work culture to move from bad to worse . People of India have great expectation from Mr. Modi and they are fully confident and convinced  that Mr Modi for the sake of good governance will not allow political exploitation of government staff in any manner. Otherwise , public servants will like to continue to act and  remain as slave of these politicians and country will continue to suffer. 

India is a country of 126 crore population and there is no scarcity of intelligent people in our country who can perform equal or better than Mr. Raghuram Rajan, present Governor of Reserve bank of India. A vast country like India cannot be dependent on any one person for long for economic prosperity or economic stability . And none of politicians or government servant is indispensible in country like India or anywhere in the world.

We have seen many Governors earning name and fame. But we have to see which Governor has helped the economy in growing on permanent basis and who has strengthened roots of our economy. We must analyse pros and cons of the matter, assess merits and demerits of Rajan regime,i identify strength,  risk and threat probabale due to Rajan and finally it is to be ascertained whether awarding  him with second term will prove beneficial for the country or prove to be a losing game.

We cannot allow politicians like Mr Subramanium Swami to malign image of a public servant , that too person like Rajan holding a prestigious post of RBI Governor. We cannot allow propaganda war or media war against a post like RBI Governor. At the same time we cannot totally ignore allegations against Mr Rajan put forward by Mr. Swami.

I simply stress here to say that Government must restrain Swami criticising RBI Governor in public domain. Any Government does not like any of his party men criticising its own government in public domain . Similarly it should not like criticism of any public servant by any politician in public domain . There is a properly defined and set  procedure for moving against an erring public servant and it must be followed by all to maintian minimum decency and decorum in the matter of governance.

Here I would like to say that our country was facing rating downgrade in the year 2013 due to decade long misrule of UPA government led by Finance Minister like Mr. P Chidambram and his predecessors. Country  lost lacs of crores of rupees in a chain of scams unearthed by CAG, opposition parties , Team Anna , social workers, RTI experts, lawyers like Prashant Bhusan and  Mr. Subramanium Swami. Image of our country was  tarnished and fully blackened during UPA rule . Environment became unconducive for growth in business, for new  investment in business  and for FDI in India .

During UPA rule, IIP figure came to negative zone. Inflation went beyond control . Foreign exchange reserve faced erosion . Value of Indian currency faced sharp and faster erosion. Exporters and importers started facing problems due to unbearable volatality in value of Indian rupee and rise in value of dollars in International market . Current account deficit and Fiscal deficit went above tolerable and sustainable limits.  Rating agencies started threatening downgrading of sovereign rating of our country. UPA government in the year 2013 got criticism from all corners on all fronts.

 When the situation went beyond control , the then clever Finance Minister Mr. Chidambram appointed Mr. Raghuram Rajan ,world famous economist as RBI Governor. He took this step in the last leg of his government .

Here it will not be out of place to mention that it was bad policies of his government and mismangement and exploitation of PSU banks by FM Mr. Chidambram  that health of public sector banks started facing  capital crisis year after year and banks started facing abnormal rise in bad assets . Mr. Chidambram did not allow Chiefs of PSU banks to treat bad assets as bad assets and this is why a large amount of bad assets were concealed by clever and corrupt bankers. It became culture of every banks to hide bad assets and show them all as standard so that they need not make any provision for these bad assets as required under prudential norms set by RBI. 

All PSU banks indulged in fraudulent exercise and they under a stretegy made lesser provision to artificially inflate annual net profit and to earn blessings of corrupt FM of that time. In order to book higher  credit growth they were forced to lend in infrastructure projects. Banks started using short term funds for long term uses and thus invited liquidity crisis. Rising bad debts hidden in balance sheets added fuel to fire.

As soon as Mr. Rajan took charge of RBI as Governor , things started moving in positive direction due to temporary , permanent , and faster steps taken by clever Mr. Rajan to stop fall in Rupee price , to control fiscal deficint ,to contain rise in bad debts and to bring inflation in control .

A few months after appointment of Mr. Rahuram Rajan as Governor of RBI,  UPA government lost the election due to its misdeeds  and Mr. Narendra Modi led NDA government came to power in the year 2014.  Mr. Arun Jaitley became Finance Minister in Government led by Mr. Narendra Modi and both worked in cooperation with RBI Governor Mr. Rajan for almostt two years.  Economy moved up and progress were visible in every parameter including inflation, fiscal deficit , rupee value etc.

Though there was huge pressure from the side of Government and business class for reduction of interest rate , Rajan did so in phased manner so that purpose of containing inflation could also be served along with executing the advice of Modi govrnment. There was overall good understanding among all three stalwarts. Cleaning of banks also started and  geared up gradually.

Here I would like to express that any more reduction in interest rate may prove deterimental and suicidal step for Indian economy from my point of view. Low interest rate regime may prove helpful to rich class business community to some extent, but in the long run it will cause much more damage to the economy , to savings culture of people of India and cause consequent erosion in  investment capacity of the government.

A country cannot propsper on permanent basis if it has no adequate resources for investment and that for expenditure and spendng on social welfare schemes. Similarly savings is the source of fund for public sector banks and if people of India start putting their savings in other better avenues, banks will face liquidity problem as well as its  capacity to lend will be adversely affected. And when bank's capacity to lend is reduced, GDP growth will also fall. Obviously FM and the government will find it very difficult to save banks from further damage , further detrioration in health and final disaster if they contrinue to cut interest rate .

In my view banks can invest in long term projects only if it is able to get long term deposits from savers. And banks should offer at least 10 percent rate to savers and there is no harm if lending rate goes up due to this to some extent. Because role of interest in majority of projects is negligible in earning profit and in its sustenance. But role of interest rate is considerably higher in survival and sustenance of pensioners and people whose family is run on interest income on their hard earned business income or terminal benefits for salaried class people.

It is Mr. Rajan who ordered Asset quality Review of PSU bank of large 150 borrowal accounts and adivsed banks to consider bad accounts as pointed out by RBI auditors as Non Performing Assets. This forced banks to treat these accounts as NPA and make higher provisions for them which resulted in loss to some bank or erosion in profits of almost all banks. Due to this bank officials who were blindly distributing bank's fund as charity to persons and companies they liked were forced to put a check point on reckless lending.

Bank officers were forced to stop slippages and recover money from wilfull defaulters. He advised government to make legal set up effective and active to help banks in recovering money from defaulters. 

Government came out with Bankruptcy and Insolvency Code 2016 to create an environment of credit discipline and inculcate good habits in business community and to ensure repayment culture which was spoilt by past governments. Government has introduced amendment bills in Parliament seeking improvement in DRT act and SARFACIE Act to make them banker friendly and make them as curse  for  cheater borrowers of banks. All taken together will help in beinging Achhe Din for banks.

But Corrupt top officials, corrupt business houses  and corrupt politicians who were looting banks for their self interest did not find it good that RBI head Mr. Rajan become strict in compliance of set guidelines and identification of NPA as per preudential norms set by RBI. 

Business houses and politicians who were getting loan after loan and who were not repaying loan in time were getting exposed and facing threat of legal action and humiliation in business community. They came together and planned ways to eliminate Rajan from picutre who forced Banks to change  from acting as  bad of roses to act as bad of thorns for defaulters. They could not digest compliance of rules by Rajan. And hence Mr. Swami portrayed the picture of Rajan as anti-national and a hinderance in the path of low rate regime.

To ilustrate, I submit one case for your study.

A patient goes to a Doctor and after examining all patholgical tests, the doctor  prescribes sour medicine and surgical operations to cure the patient. This doctor is considered a beast by patient and anti-human. On the other hand if the same patient goes to another doctor who after examining all symptoms , says that patient is ok in all respect and need not take any medicine. Rather he advises to take sleeping pills , drugs and wine to forget sickness.

After some time patiens gets cure in first case whereas on the other hand the same patient may die in case of obeying advice of other doctor. Rajan is acting similar to first doctor and hence rejected by the banking patient who is addicted to taking wine, drugs and sleeping pills . 

On the other hand FM like  Chidambram preferred second line of action and he managed all Governors of the past to a great extent in following his line of action. As a result of his ill-advice , all banks are now in worst health condition and likely to collapse.

 Rajan committed a blunder by exposing critical sickness inflicted in body of banks  and by prescribing sour medicine , painful injection  into bank's body and by carrying out surgical operation on PSU banks to remove evil culture of concealment and window dressing. He in cooperation with Modi government stopped culture of selling post of ED and CMD  which used to take place during UPA regime. He helped government in formation of Bank Board Bureau headed by hard core honest and sinceere person Mr. Vinod Rai for improving health of banks.

Now after end of Rajan's tenure , it will be hard nut to crack for new comer to cure the ailing banking system and to set right the economic system which was ruined by past governments. I say so because evil culture in lending is deep rooted in banking culture and it is not easy for anyone  to stop rising trend in NPA .

 New comer may again resort to art of restructuring and evergreening of bad loans or selling of bad loans to ARC to conceal bad loan in another bottle and inflate profit as done in the past. But there is no doubt in it that bomb of NPA has to explode , sooner or the later.

Our country run on the basis of certificates and banners. Team of Chartered Accountants will be bought to certify bad loans as good loans and again all banks will start booking higher false profits by saving provisions on bad loans. But this is not a permancnet solution to the problem banks are facing or country is facing.

Lastly I like to make it clear that I never mean to say that alleged guilt of Rajan should be ignored only because he has taken some good steps to improve health of economy and that of banks. I rather feel that all charges levelled against Mr. Rajan by Mr. subramanium Swamy must be investigated and proper action must be taken if needed. But dirty politics on continuance of a person like Mr. Rajan inparticualr or on any governent officials in general  will give rise nothing but a chain of  evil culture where politicians will bark upon public seervants to serve their self motive and get their illegal work done. 

Ultimately this invisible fear of humiliation promotes a culture of flattery and bribery in administrative officials. It is open secret , that good officers are subjected to torturous transfers and face rejection in promotion processes if they do not flatter to their bosses in political circle.

 IAS and IPS officers are indulged in flattery to their ministers at the cost of national interest. If Swami like politicians continue to attack top officials , culture of flattery and bribery will rise more and more and all efforts to contain and control corruption will go in vain. 

Country will progress only by inculcating good cultre in all departments where good workers can perform and bad workers are ignored or removed. WE have to create an environment where all workers can work without fear of political intervention , repercussions and without fear of getting torturous transfers or rejection in promotion processes . Until HR policies are made performance oriented and until flattery is given a final good bye , we cannot hope of any reformation and transformation in the system.

I hope Mr. Narendra Modi who is sincere, honest and hard worker for the progress of the country and for the comfort of common men will take cognizance of evil design of Mr. Swami and take appropriate corrective action to stop recurrence of the same.

Here  are 10 points Mr. Raghuram Rajan stated in his  letter addressed to the RBI team-

1) When I took over, India was labelled one of the 'Fragile Five'
2) I laid out an agenda for action and a new monetary framework.
3) We focussed on bringing inflation down and raising forex reserves.
4) My plan took on the licensing of niche and general banks by committees.
5) I undertook the creation of the Bharat Bill Payment system and the Trade Receivables Exchange.
6) Extended payments to all through mobile phones.
7) Developed a large loan database to better map distress in this area.
8) Today inflation has been halved and savers earn positive interest after a long time.
9) Currency has stablized and government has launched a 40 year bond for the first time.
10) The new Bank Board Bureau has been instrumental in creating a structure for PSBs.



Here in below is full text of letter written by RBI governor Mr. Rajan to his staff:--
Message to RBI staff from Dr. Raghuram Rajan.
Dear Colleagues,
I took office in September 2013 as the 23rd Governor of the Reserve Bank of India. At that time, the currency was plunging daily, inflation was high, and growth was weak. India was then deemed one of the “Fragile Five”. In my opening statement as Governor, I laid out an agenda for action that I had discussed with you, including a new monetary framework that focused on bringing inflation down, raising of Foreign Currency Non-Resident (B) deposits to bolster our foreign exchange reserves, transparent licensing of new universal and niche banks by committees of unimpeachable integrity, creating new institutions such as the Bharat Bill Payment System and the Trade Receivables Exchange, expanding payments to all via mobile phones, and developing a large loan data base to better map and resolve the extent of system-wide distress.

By implementing these measures, I said we would “build a bridge to the future, over the stormy waves produced by global financial markets”.
Today, I feel proud that we at the Reserve Bank have delivered on all these proposals.

A new inflation-focused framework is in place that has helped halve inflation and allowed savers to earn positive real interest rates on deposits after a long time. We have also been able to cut interest rates by 150 basis points after raising them initially. This has reduced the nominal interest rate the government has to pay even while lengthening maturities it can issue – the government has been able to issue a 40 year bond for the first time. Finally, the currency stabilized after our actions, and our foreign exchange reserves are at a record high, even after we have fully provided for the outflow of foreign currency deposits we secured in 2013. Today, we are the fastest growing large economy in the world, having long exited the ranks of the Fragile Five.

We have done far more than was laid out in that initial statement, including helping the government reform the process of appointing Public Sector Bank management through the creation of the Bank Board Bureau (based on the recommendation of the RBI-appointed Nayak Committee), creating a whole set of new structures to allow banks to recover payments from failing projects, and forcing timely bank recognition of their unacknowledged bad debts and provisioning under the Asset Quality Review (AQR).

We have worked on an enabling framework for National Payments Corporation of India to roll out the Universal Payment Interface, which will soon revolutionize mobile to mobile payments in the country. Internally, the RBI has gone through a restructuring and streamlining, designed and driven by our own senior staff. We are strengthening the specialization and skills of our employees so that they are second to none in the world. In everything we have done, we have been guided by the eminent public citizens on our Board such as Padma Vibhushan Dr. Anil Kakodkar, former Chairman of the Atomic Energy Commission and Padma Bhushan and Magsaysay award winner Ela Bhatt of the Self Employed Women’s Association.

The integrity and capability of our people, and the transparency of our actions, is unparalleled, and I am proud to be a part of such a fine organization.
I am an academic and I have always made it clear that my ultimate home is in the realm of ideas. The approaching end of my three year term, and of my leave at the University of Chicago, was therefore a good time to reflect on how much we had accomplished. While all of what we laid out on that first day is done, two subsequent developments are yet to be completed. Inflation is in the target zone, but the monetary policy committee that will set policy has yet to be formed. Moreover, the bank clean up initiated under the Asset Quality Review, having already brought more credibility to bank balance sheets, is still ongoing. International developments also pose some risks in the short term.

While I was open to seeing these developments through, on due reflection, and after consultation with the government, I want to share with you that I will be returning to academia when my term as Governor ends on September 4, 2016. I will, of course, always be available to serve my country when needed.

Colleagues, we have worked with the government over the last three years to create a platform of macroeconomic and institutional stability. I am sure the work we have done will enable us to ride out imminent sources of market volatility like the threat of Brexit. We have made adequate preparations for the repayment of Foreign Currency Non-Resident (B) deposits and their outflow, managed properly, should largely be a non-event. Morale at the Bank is high because of your accomplishments.

I am sure the reforms the government is undertaking, together with what will be done by you and other regulators, will build on this platform and reflect in greater job growth and prosperity for our people in the years to come. I am confident my successor will take us to new heights with your help. I will still be working with you for the next couple of months, but let me thank all of you in the RBI family in advance for your dedicated work and unflinching support. It has been a fantastic journey together!
With gratitude
Yours sincerely
Raghuram G. Rajan


As Rajan ends speculation on his continuance, Hindustan Times  takes a look at his achievements as the central bank’s chief:

Stabilising Rupee: The rupee, which weakened to a record 68.80 against the dollar in August 2013, stabilised over 10% between September and December 2013 after a number of RBI measures taken on the day of his joining the central bank.

Beefing Up Reserves: Today, India’s foreign exchange reserves are at a record high of $363.23 billion as on June 10.

Easier Banking: Rajan also released on-tap licensing to ease the process of universal bank applications that enable services such as payments via mobile phones.

Inflation-focused Monetary Policy: Under his governorship, the RBI came out with a new monetary framework that focused on bringing inflation down and raising of Foreign Currency Non-Resident (B) deposits to bolster foreign exchange reserves.

Inflation: Rajan’s sustained policy focus helped the RBI bring down inflation to below 5%. Under him, a new monetary framework that focused on bringing inflation down was formalised.

Interest Rates: Lower inflation and stability in currency markets helped Rajan bring down key repo rate to a five-year low. This helped the economic growth and consumer spending.
Outside the RBI

Rajan predicted the 2008 global financial crisis. In 2005, at an event honouring Alan Greenspan, who was about to retire as chairperson of the US Federal Reserve, Rajan delivered a paper on “Has Financial Development Made the World Riskier?”, and he argued that the disaster might be looming.

IMF chief Christine Lagarde said at an RBI event in March 2015 that the world should have listened to Rajan.

Indian Express writes about unfinished agenda of outgoing Mr. Rajan

His unfinished agenda

* Monetary policy committee that will set policy framework is yet to be formed
* The bank clean up initiated under the Asset Quality Review, is still ongoing
* Navigate the country through the Federal Reserve’s interest hike cycle

Risks looming large

Brexit: On June 23, Britain will vote whether it wants to remain a part of the European Union, or leave. In the near term, an exit could will heighten global volatility, thereby impacting capital flows into emerging markets and could have a currency impact in the longer run. India has a big trading corridor with the EU.

FCNR bonds: A big risk could be the redemption of the Foreign Currency Non-Residential (FCNR) bonds issued by Rajan way back in October 2013 to protect the rupee from its worst slide in decades. The bonds are due for redemption and the currency market could face an impending outflow of $20 billion, which will put the Rupee under pressure.

Click Here to Know Which Comments of Rajan hurt NDA Government

Inflation risk: The latest policy statement highlights the upside risk to inflation; CPI has been rising due to a rise in food prices while core inflation also remains high.