The term of the RBI Chairmen Mr. Raghuram Rajan ends with September 2016. However, already his supporters are calling for an extension of his tenure with one more term. This report http://zeenews.india.com/business/news/economy/rupee-and-bond-market-at-risk-if-raghuram-rajan-not-given-a-second-chance-clsa_1882875.html even says that rupee is at risk if he is not extended. All this sounds very familiar is it not? I mean Manmohan Singh(MMS) version 2 in making. I am not an economist or any supporter of Rajan. In fact, I feel all the UPA appointees are guilty unless proved otherwise.
The media hero worshiping of Rajan and efforts to create a new savior of dirty Indians rings all the familiar tones from the times of MMS and nothing else.
This usual clamour for a US Green card holder is regular feel to it. In the case of MMS entire credit of reforms were given to him and nothing to Sri P.V. Narasimha Rao the PM at that time. The reason for ignoring Narasimha Rao is well known. Similarly, entire credit of the lowering inflation entirely attributed to Rajan completely ignoring the role of Indian Government which has strictly followed financial prudence and made many structural reforms and tried to rain in the prices of food commodities, etc. This time, also the reasons for ignoring Sri Modi are well known.
Let us examine RBI role as a regulator of Banks under him. Any reasonable person would have seen NPA problem 3 to 4 years ago. He neither said anything about it until recently nor done anything to stop further accumulation of NPA till date. Ignoring RBI guidelines are very frequently. Huge levels of NPA show how pathetic the RBI’s annual financial inspections of banks are during his tenure. Entire appraisal and lending process have gone to a toss for the last several years. RBI did nothing. As almost every one in the banking sector knows about it and one can be sure that Mr. Rajan also knows it. Thing happened. He seems to be busy making statements like the one-eyed person is a king in the land of the blind. This arrogance is being potrayed as truth by enlish media which do not want to give any credit to present NDA government for saving the nation from the abyss of UPA times.
What major reforms we have seen in the functioning of RBI in the recently? None. Yes, he has given licenses for three more banks. Any reasonable person in the free enterprise would have removed this entire licensing drama altogether. Now we hear that he is trying to do something called “on tap” thing as per media reports. Anyone who can look into Indian banking sector knows that we are one of the most under-banked nation in the world. He merely continued the same license, permit, quota raj of old times. He talked a lot about Payment Banks etc. and what happened on the ground? Nothing. It is the Prime Ministers personal interested which saw a huge number of accounts under Jan Dhan Yojana and brought large sections of poor people under banking. This can be termed as one the most significant events in Indian Banking sector since nationalisation, and the role of RBI in this is NIL.
There is also no significant change in the functioning of RBI. For all major announcements and publicity given for initiatives like whistleblower mechanism, no one even reports any irregularities to RBI out of fear as those who reported lost their jobs and even when written to Rajan personally, he did nothing.
The truth is Mr. Rajan like many others before he acted as a glorified babu.Let us not make too much of his contributions and achivements as RBI Chairmen.