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When the bureaucrats slept !

While the book by former RBI Governor Duvvuri Subbarao (IAS 1972) is non-controversial, the forthcoming book by the last RBI Governor Urjit Patel (to be released after a month from now) is is eagerly awaited by financial and monetary economists across the world. By 2014 India’s Public Sector banks had been captured by some ‘unscrupulous racketeers’. This unprecedented capture of the public banking sector by these ‘tycoons who were running their empires on unpaid debts’ went unnoticed by the bureaucrats in the Ministry of Finance, the RBI, office of CAG, and in the Board of Directors of these banks. Patel's resignation came at a time when relations between the government and the RBI had soured, with the Ministry of Finance threatening to invoke a never-before used clause to give directions to the RBI. He was quickly replaced by Shaktikanta Das (IAS 1980). Patel made no public comments on Government policy either during or after his short tenure as Governor, RBI apparently saving his firepower for the book which while dealing with this ‘bad loan crisis’ in great detail is likely to be more focussed on the autonomy of the RBI. In our country, where the Government owns banks it ‘can use our deposits to lend and splurge for goals that may not always be economic in nature’. In his view, RBI should be free to 'manage money and regulate banks'. Recently Patel has taken over as (non-Executive) Chairperson of the Governing Body of National Institute of Public Finance and Policy - nominated to this post by the outgoing Chairperson Vijay Kelkar.

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