Private Bankers, Public Servants and RBI

This article is well intended and carries lot of messages to correct the wrongs by the powers that be in abusing and misusing the powers taking advantage of the technical loopholes found in the interpretation of different acts. The Supreme Court has done a wonderful job in correcting the lapses observed in different acts and their applicability to private sector Undertakings. Mr Gelli  played havoc and took the GTB bank depositors and shareholders for a ride and the Supreme Court's  verdict finding him guilty in terms of the Provisions of PCA and BRA is a message for all to be careful in dealing with public money whether they are serving in Government or in private sector. However, the author is not fully right in saying that RBI as regulator covered up its regulatory failures and avoided losses to depositors by forcing the GTB's merger with the Reluctant Oriental bank of Commerce. In fact RBI has done its best to protect the banking system by eliminating the wrong doer and avoiding the systemic risk the GTB  could have done had it been allowed to continue with all its irregularities and staggering bad assets. RBI is one of the strong Institutions the Country has produced and this has been recognised all over the world. RBI is also functioning in a weak Governance system the Country has in general and RBI has autonomy only on paper and not in Practice. There are two Nominee Directors on RBI's Board from the Central Government and RBI can be easily dictated by the Government. Even the pension updation agreed to by the Government way back in 1990 has not been implemented as on today is the reality. All said, the financial system in general and banking system in particular continue to remain strong and the credit definitely goes only to RBI for its strong  professional approach to carry out its defined functions as per the RBI Act, 1934  with all limitations known to all those who matter in the area of Economy, Finance, Judicial system and administration.        

Dr T V Gopalakrishnan

(This comment is published in Money Life  against the article Private bankers are public servants dated 30/3/16)