ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles By Raghuram Rajan

Concentration, Collusion and Corruption in India’s Banks

Why would companies, for whom costs rise with higher interest rates, choose to amass credit as interest rates rise? Were more and more loans taken with the understanding that default would be inevitable? Only a commission of inquiry with a specifi c mandate to understand the years of loose lending by banks in India can answer these and other uncomfortable questions. These answers are needed in the interest of securing our economy, and indeed our democracy.

What Should be the Criteria for Choosing RBI Governor?

Spending a few years in Washington D C as India’s executive director at the International Monetary Fund or some Ivy League think tank should not be considered as a qualification for the post of Governor of the Reserve Bank of India.  Instead, deputy governors and even those junior to them who have spent the immediate preceding years working in Mumbai, and most of whom do have doctorates the PhDs in relevant sub areas, should have the first lien on the governor’s job.

‘On-tap’ Bank Licences

Critically evaluating the draft guidelines for “on-tap” bank licences put up by the Reserve Bank of India, it is argued that India’s banking system is already sufficiently competitive, and there appear to be few who would be willing to enter the banking business. Entry of newer players, especially those with corporate backing, cannot be the priority at the moment. The priority over the next two or three years has to be the resolution of the non-performing assets problem and strengthening of the existing players.