Tiger and Palm Tree

My corporate governance experience

Henry Martin on Corporate Governance — Henry Martin’s famous cartoon, “All Those in Favor Say ‘Aye'”

I initially thought of titling this Advice to a Young Director, in the manner of Advice to a Young Scientist by Sir Peter Medawar, the British-Brazilian biologist and writer of Lebanese origin, and Nobel Laureate in Medicine (1960). Writing of Medawar, “The wittiest of all scientific writers,” wrote Richard Dawkins, and “the cleverest man I have ever known,” wrote Stephen Jay Gould. Coming from Dawkins and Gould, there cannot be higher praise. Medawar’s short book, suggested by a Physics Professor at IIT Madras, stayed an inspiration through my research. It is highly recommended for researchers in any discipline including corporate governance. Continue reading “My corporate governance experience”

The Kerala Model: The Stories Within

The Kerala State’s Economic Review 2020 blandly claims that the State’s development outcomes are comparable with the most developed countries. Is this true? Has Kerala’s progress in economic indicators since independence been superior to that of other States? To what extent are the State’s historical, geographical, social, and cultural factors responsible for its superior outcomes? Didn’t countries and regions with similar characteristics have similar and perhaps better outcomes? We examine these questions and are led to conclude that the ‘Kerala Model’ is less a model and more an experience. Continue reading “The Kerala Model: The Stories Within”

RBI Quiz 2021 – The Answers

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”

Reserve Bank of India Quiz 2021

Wish all the readers of ‘Tiger and Palm Tree’ season’s greetings and best wishes for a happy new year. Please see below the questions in Reserve Bank of India Quiz 2021. I will post the answers next week.

Continue reading “Reserve Bank of India Quiz 2021”

Indian Cooperation: Finding Raiffeisens

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”

Former SBI Chairman’s Arrest

The story of a former SBI Chairman’s arrest and release: the case of a resolution and retribution.

Sometime in early 2004. I was the last in-charge of the Reserve Bank of India’s Chennai Office of the (then) Department of Banking Operations and Development, now called the Department of Regulation. The following July the Regional Offices merged with the Bank’s Department of Banking Supervision (now Department of Supervision). Late in the afternoon, a short and quiet person walked in unaccompanied. He had recently taken over as the Chief General Manager of the Chennai Circle of State Bank of India. Seven years later he became the Chairman of the bank. He needn’t have troubled himself to meet me. At least the Reserve Bank I knew and admired never stood by such empty formalities. Nevertheless, the simplicity and humility of the man impressed me. Therefore, the news of his arrest shocked everyone who knew him. Continue reading “Former SBI Chairman’s Arrest”

Sir Everard Hambro’s central bank proposal

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”

“Policy Maker’s Journal” by Kaushik Basu

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”

History of Indian Currency: The Fowler Committee

Sir-Henry-Fowler — Sir Henry Hartley Fowler

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”

Opening current accounts in banks

The Case of the Reserve Bank of India Circular on Opening Current Account

An oft cited paper in the literature on regulation goes by the title “Gentle Nudge vs. Hard Shove”. The regulatory dilemma is exemplified by the recent case of the Reserve Bank circular on opening of current accounts. Years of “gentle nudges” which did not result in banks complying with instructions regarding credit discipline seem to have resulted in “hard shoves” involving more hands-on regulation.

Some bank borrowers have taken the legal course demanding quashing of the Reserve Bank of India circular dated 6 August 2020 on opening current accounts by banks. The Bank has since further extended the last date for compliance to 31 October 2021. Continue reading “Opening current accounts in banks”