Indian banking, central banking, and the economy
Quiz 2022, like last year, focuses on central banking in India.
There is a prize, like last year, for the first person to answer all questions correctly. The details are in my substack post. Participation in the quiz is open to those who were following me on substack at gsreekumar.substack.com as on 31 December 2022. Continue reading “Year-end Quiz 2022”
Last week I had posted questions for the RBI Quiz 2021. The answers are provided below. I should add that most of these questions are curtain raisers to future and more elaborate posts on the subject. Stay tuned! Continue reading “RBI Quiz 2021 – The Answers”
That wretched woman with the infant in her arms, round whose meagre form the remnant of her own scanty shawl is carefully wrapped, has been attempting to sing some popular ballad, in the hope of wringing a few pence from the compassionate passer-by.
Charles Dickens, Sketches by Boz
“Cooperation has failed, but cooperation must succeed,” is an oft-quoted extract from the 1954 report of the All India Rural Credit Survey Committee (AIRCSC). Sir Benegal Rama Rau, the fourth Governor, Reserve Bank of India, appointed the Committee. No other financial sector was the subject of scrutiny by as many committees as Indian cooperation. The quote is believed to be the contribution of Burra Venkatappaiah, of the Indian Civil Service. Venkatappaiah was then the Reserve Bank of India’s first Executive Director, and a member of the AIRCSC. He later became Deputy Governor, and the fourth Chairman of the State Bank of India. Thereafter he chaired the All India Rural Credit Review Committee which reported in 1969. I have a separate post on Venkatappaiah coming up, but my focus here is on Indian cooperation. Continue reading “Indian Cooperation: Finding Raiffeisens”
In the history of Indian currency and central banking, the Fowler Committee occupies an important position. But, its relevance went beyond the currency question. One suggestion that emanated from its report was Sir Everard Hambro’s central bank proposal. Hambro suggested establishing a state bank along the lines of the Bank of England and the Bank of France. Hambro’s central bank proposal is contained in a brief note attached to the Fowler Report. It provided the rationale for the proposal. The suggestion went back and forth between Calcutta and London before it was dropped after objections from different quarters. Continue reading “Sir Everard Hambro’s central bank proposal”
Prof. Kaushik Basu in his “Policy Maker’s Journal” describes an incident where he and three friends, on a holiday in Cusco, Peru, were walking back to their hotel through deserted streets, when they saw a native girl, sitting alone and crying. Her mother had made her wait while she went home to fetch something. It was getting late, and she was hungry. But, they found food in her bag, and asked her to eat that. She said that they were for sale, and not for eating. They then bought some food, and gave her. We will never know whether she ate it. But, Kaushik was left “with an awareness of the human predicament that reading books and guzzling statistics cannot give.” Continue reading ““Policy Maker’s Journal” by Kaushik Basu”
Five years after it implemented the Herschell Committee recommendations in 1893, the Government of India made fresh proposals. The British Government, in turn, appointed the Fowler Committee in 1898 to examine these proposals.
In 1893, as endorsed by the Herschell Committee, and approved by the British Government, the Indian Government discontinued silver coinage. The intention was to eventually introduce a gold standard, the most important step in ensuring an exchange rate of 1s. 4d. This was not achieved for nearly five years. Therefore, the Government of India submitted fresh proposals to the Secretary of State for India to hasten the process. Some of these were drastic. These included the sale of bullion worth £ 6 million. There was also to be a sterling loan issued to make good the loss. Continue reading “History of Indian Currency: The Fowler Committee”
Sir Purshotamdas Thakurdas next made a major contribution to the work of the Indian Retrenchment Committee. The implementation of the Acworth Committee recommendations, including greater investment for railway expansion and a separate railway budget, increased government expenses substantially. The government feared that it might not be able to meet these rising expenses. Following this, the government responded by cutting expenses even by laying off people wherever possible. To find the means of doing this, it appointed the Indian Retrenchment Committee, which functioned during 1922-23. Continue reading “Purshotamdas Thakurdas, Part 3”
In the next stage of his life, Purshotamdas Thakurdas, now in his early 40s, was pursued for being on various important Committees. The first such was the Acworth Committee. The reason must have been his balanced approach to all matters, in-depth knowledge and understanding of the commercial and financial aspects of various issues on hand, clear articulation in English, and fearless elucidation of his views even if they were unpalatable to the Chairman of the Committee/Commission, or its other members. This was a rare combination of qualities not commonly found even today. Continue reading “PT and the Acworth Committee”
Purshotamdas Thakurdas, the young crusader, Sir PT or PT to friends, and as “King of Cotton” among other epithets, had a formidable reputation for his honesty, integrity, and fierce independence. He retained these characteristics while serving on up to seventy bodies. These included the Round Table Conferences, legislative councils and assemblies, committees and commissions, and trusts and boards. He served in these as trustee, director, commissioner or chairman. Moreover, PT was an untiring crusader for various public causes from a young age, including famine relief. He was also the fourth longest-serving director on the Central Board of the Reserve Bank of India. The next month, July 2021, denotes the 60th year of the passing away of Sir PT. This is the first in a series of posts covering the life and work of Sir PT. Continue reading “Purshotamdas Thakurdas as the young crusader”
One hundred and sixty years after government paper currency was introduced in India in 1861, digital payments are leaping ahead, and Central Bank Digital Currency is round the corner. But, paper currency is here to stay. Notes in circulation will, in aggregate terms, soon cross Rs. 30 trillion and approach double the pre-demonetisation level. Continue reading “Reimagining Indian Currency”