The need to be catious on FSLRC Report Implementation

The article has highlighted the flaws of the Report very well and gives rise to the questionable efficacy that the recommendations if accepted and implemented. The very fact that four members have dissented and expressed their own views, is an indication that the recommendations if implemented will not help to bring efficiency and soundness to the financial system which has been well nurtured and made to resist to yield to any temptations unworthy of, by the Reserve Bank and other regulators. Principle based supervision will not work in this economy where principles, ethics and values have been given a go bye is a truth which no one can challenge.A lot of serious thinking is required before accepting and implementing the FSLRC report is what the article highlights with some solid examples.

Dr.T.V.Gopalakrishnan

( This comment has been published in ET in response to an article 'The FSLRC Report is flawed in its approach)

Regulation is a must

With all the regulations and supervisions,loots are on the increase in the economy and not a day passes without a scam or fraud being reported. Where is the scope for taking away regulation in the name of cost.Regulatory cost has to be brought down that does not mean that regulation itself can be abolished. It will be a dangerous move as our people are unfortunately not that honest and ethics and values have been given a go bye long back.Better to be practical and realistic.

Dr.T.V.Gopalakrishnan
( This comment appeared in ET  dated 30/3/13 in response to an Article Regulatory Impact assessment )

Attract inward remittances to meet the CAD crisis

The economy has already reached the tipping point of crisis and is comparable to that of 1991 BOP crisis except perhaps for holding some extra reserves which is more than offset by increase in external debt. The position is precarious and the only way to come out of the mess is to attract as much remittances as possible through some incentives and reduce the import bill to the maximum. The rupee has already depreciated by more than 20 % in the last couple of years and further devaluation if any will only boomerang.Time for RBI and the GOVT to shed their ego and act jointly on a war footing before the situation worsens. further.
Dr.T.V.Gopalakrishnan
( This comment is in response to man Article Govt Sins come back to haunt us that appeared in ET dated 29/03/11)

Current account Deficit beyond tolerable position.

Figure looks so scary and how The Govt and RBI will tackle the problem without hurting the common man who is already suffering under inflation and very high asset prices. The situation is worse than what was obtaining in 1991 crisis. The Fiscal deficit is equally worse and the GDP Growth and Inflation levels are also going from bad to worse. The over all position resembles that of 1991 crisis but only consolation is that our Forex reserves are some what better as compared to 1991 position.Dr.T.V.GopalakrishnanThis comment is in response to the news item Q3 FY 13 Current Account Deficit at record high of 6.7% that appeared in ET dated 28/03/11)

BRICS and their Bank

The article reads well. The need for economic cooperation among the developing economies is paramount and the idea of establishment of a bank by these economies will definitely bring the equilibrium very badly needed by them and the IMF and world bank will also shed their flat and come to senses.The capital for this bank can be based on the development Index of these nations or on the basis of population. The bank once formed can take care of the capital flows and help these nations with adequate funds for the infrastructure development.Even the Exchange rate fluctuations can be regulated to a great extent as the Bank will have sufficient reserves to control and regulate the flights of capital.

Dr.T.V.Gopalakrishnan

(This comment is in response to an Article BRIC by BRIC that appeared in ET dated 28/03/11)

Cobra Post Need for a thorough scruting

The news is not surprising.What is surprising is that this has been brought out by a private agency instead of by the regulators and law enforcing agencies.
The banking system handles and holds a lot of black money is not a secret. Our informal economy may be equal to formal economy if not more is a well known fact.The selling of Gold coins,insurance products etc in branch premises has enabled banks to cover up all illegal transactions. The new generation Private sector banks are always a challenge to the regulatory system and they are ahead of the regulators in introducing innovative products without perhaps getting them vetted by the regulators. They know very well that the system permits or tolerates aberrations and the aberrations are done on whole scale basis.It is practically impossible for the regulators to check each and every transaction that takes place in banking.Further the present inspection also does not expect to be transaction based as per the liberalised approach. Banks know the weaknesses and they are smart in violating the rules and regulations. The auditors are banks own paid employees and they cannot be expected to point out their fingers at them.On the contrary they help the banks to cover up the transactions. There is always a trade off between banks and auditors.
The only way to stop banks from indulging in money laundering activities is to ban the sale of insurance products and gold coins. Further, the regulator has to tighten its noose by increasing the number of branches taken up for inspection and improving the scrutiny standards of the data they get at periodical intervals.The banning of gold sale will also help to fight black money and minimise investments in gold at least through banks.

Dr.T.V.Gopalakrishnan
( This Comment is in response to an Article 'Cobra Post Sting Dont settle for a small fry, follow money trail' appeared in ET dated 15/3/13)

Big Companies, NPAs and black Money

The big companies having one or two as sick units have several benefits on tax and other reliefs and concessions.Even keeping accounts as NPAs, the possibility of converting black money into white and money laundering cannot be ruled out.How far bankers are vigilant is a matter to be probed.Ethical way of doing business has been wearing out and suspicious transactions violating prudence and values galore. As rightly observed compared to the past particularly in the 1970s and 1980s, the number of sick companies in well run and reputed groups are definitely on the decline.

Dr.T.V.Gopalakrishnan
( This comment is in response to an article "of affluent promoters, sick companies" appeared in ET dated 22/3/13)