Banking, Uncategorized

India at Davos

So India is no longer the flavour of the season in Davos. Is that a surprise at all? Why hold only the government responsible even if they do take the major blame. Companies have hardly acquitted themselves well and the judiciary has also contributed its share of irrationalism.

Take the SC decision where 122 telecom licences were cancelled one fine day in one fell swoop. This decision was one of the worst exercises of judicial dictatorship in recent memory.  Certainly there seems to have been corruption in the grant of these licences, and both the bribe giver and the bribe taker need to be taken to task. However, foreign investment into these companies came only after the licences were granted. For sure, the companies put in the funds after the licences were awarded. The cancellation of the licences badly affected the credibility of India as a stable investment destination.

The 2G losses were arrived at by CAG based on the very high premiums these companies paid  Are we going back to the heady days of Indian socialism where the Controller of Capital Issues decided what premium a company inviting investment can charge? If high premiums are a criteria or wrongdoing, then every single investment into the e-commerce sector would be suspect.

Cancellation of these licences where nothing was started, and no further investment had been made would perhaps have been justified, but to disrupt entirely companies which had already started operation, which included companies like Loop Mobile which already had ongoing operations, or those companies which has already made heavy capital investment was ridiculous to say the least. What the court should have done is to direct the government to auction these licences and reallot them fairly. Whichever company won the licences could then have taken over the investments made and assets created by the earlier allotted companies which would have gone a long way in assuaging the concerns of the foreign collaborators.

Banks have bad debts, and they have accumulated to very high levels. There are many reasons for this. Some of it, like in the case of Vijay Mallya is corruption. Other loans have become stuck because infrastructure projects has been held up mainly because of land acquisition issues. Some loans have become stuck because of diversion of funds. Real estate project loans are stuck because markets are down. So it is not just one reason and each loan needs to be handled accordingly. Making a huge noise about it is self-defeating. It does not make any sense to make statements which bring down the entire credibility of the banking system and all the borrowing companies.



Banking, Uncategorized

RBI & Demonetisation

  • RBI seems to have been unnecessarily open with information on notes surrendered at bank branches during this whole period.
  • It is now quite apparent that information fed to top management of RBI from below was either deliberately or inadvertently exaggerated.
  • Having learnt lessons from that, now at least RBI is being careful in releasing information in the public domain & to Committees.
  • Instead of bleating about “loss of independence”, RBI Unions would do well to look at the rot in their own membership.
  • Not just in feeding wrong information to their bosses, there is enough indication that some RBI employees colluded to mislead and also actively acted wrongly.
  • Only Income Tax, ED and such other authorities can actually seize or freeze unaccounted funds in banks but banks themselves can take some action themselves.
  • There is no reason why bank officials should not be held accountable for misusing inoperative accounts, manipulating exchange of currency and so on and managements should also be held to account for taking corrective action.
  • There is no doubt that there is a deep rot in the banking system where corruption is rife and many, if not all, banks are involved.
  • Role of post offices should also be investigated to see if they have acted outside their remit in facilitating wrongdoing in exchange of banned notes.
  • Finance Ministry & RBI need to act much more promptly to ensure that credibility of banks is retained.


Education, Uncategorized

Skill Development

Most skill development programmes in the country, whether of the government or other organisations seem to be tailed for those who are, or have been, unable, unwilling or for some reason incapable of completing a course of formal or even semi-formal school/college education. So we have colleges for engineers, doctors, architects and even those interested in catering. We have examinations for accountants, auditors and so on but no colleges or qualifying examinations for say a carpenter, a painter, an electrician or a mason.

So we have those in all these trades who have started out as helpers or assistants of more experienced craftsmen in that line, and by dint of their hard work and self-initiative, taken up independent jobs gradually making a name for themselves.

Formal school education is also standardised to mean every student takes up almost the same subject and course curriculum up to sixth or eighth standard, and then opted either for science or commerce. In junior college too there is mostly science and commerce, and in some cases arts too. So any choice of a formal career course say for law, catering, architecture, medicine or engineering comes up after these 121 years of standard education. It is almost taken for granted that those who cannot or do not wish to take up any of these options tries to go in for “skill development”, which means mobile repair, beautician etc.

We find many stories of children who dream of becoming engine-drivers or firemen. That is ofcourse just imagination. However, if a child even as young as twelve shows a keen inclination and talent to become an artist, and who might well opt to take it up as a career, why would such a child be forced to continue in the same formal courses which would not be useful at all to them in such a career.

While school might well be too early for a child to make such an important decision, in India at least, such a child is often forced to study some subject they have no aptitude for, just so that parents are happy their child is “atleast a graduate”.

Isn’t it about time, we broaden the choices in schools and colleges, and incorporate skill development options into the formal curriculum so that children and youngsters get much more choices? Why not introduce more vocational universities with courses like Bachelor in Construction Management with specialisation in masonry, electrical work, carpentry or house-p0ainting?

When the Pradhan Mantri Kaushal Vikas Yogana (PMKVY) was first introduced, there were reports that several vocational universities would come up with skill development being offered at graduate, post-graduate, even doctorate level. What happened to all those options? Were there not takers for this? Apart from more short-term courses in a lot of areas and functions, which are definitely useful and have opened up several opportunities for employment and entrepreneurship, not much seems to have been done in terms of longer courses and options.

Education, Uncategorized

Formal Education – School Board Examinations

After a few years of experimenting with a system of continuous evaluation, and an option for the hitherto mandatory board examination for 10th Standard, the CBSE board is now contemplating going back to the earlier system of mandatory board examinations.

The optional system threw up quite a bit of confusion in the minds of the students and parents. Not sure if the continuous evaluation system, which put the onus on their schoolteachers to evaluate their students, which many were not fully equipped to do, many students and their parents continued to go with the board examinations option. Others, parents who were unhappy with the pressure of board examinations on their children, as well as children themselves, saw the continuous evaluation option as less stressful.

However as other boards like ICSE continued with board examinations, and marks in 10th standard were the only criterion for admission to 11th standard and/or first year of junior college, the process of admission threw up various challenges. As it is, various states which have their own education boards for 10th and 12th standard examinations have their own ways of evaluating the examination papers. Some seemed to be more liberal than others, others perceived ICSE to be more liberal, still others thought the reverse.

As it stands therefore each state board and the central boards for ICSE and CBSE lay down the law in their own way. What is uniform is that options in school finals are limited to three streams – arts, science and commerce. Of late there are some options in vocational subjects.  The mandarins who decide on education policy are normally quite straight-jacketed in their thinking. The British bequeathed to us an education system that they thought was optimal for us. Perhaps in various ways it was at that time. However, with time, students who are now much more aware of the ways of the world started to opt out of standard employment choices of medicine and engineering, into myriad interests and vocations. Given this, the curriculum in schools needed to extensively rewritten to throw up options in line with the pursuance of such career choices. This has unfortunately not happened.

Why would a school student, who wishes to pursue a career in creative arts – say painting or sculpture, gain by studying algebra and trigonometry? Not much, but he or she does not presently have a choice and has to go with the flow. It is high time we recognise that apart from basic reading and writing in English/your native language, one additional language for those who wish to learn, and very basic maths which everyone needs to know, all other subjects should be made optional and many, many more choices introduced at the school level itself. As it stands now, most options are available now only from under-graduation courses. This thinking needs to change.

Banking, Uncategorized

Banks and Demonetisation

An unfortunate consequence of this increasingly ugly political slugfest that any “discussion” on demonetisation has become is the dragging of an upright, well-respected RBI Governor into unnecessary controversy. A man too decent to counter all the moronic comments.

There is every indication that all due process was followed before this important decision was announced. The RBI discussed it and made a recommendation. Once the government accepted it, and decided on November 8, 2016 to announce it, approval was taken first from the RBI Central Board and then the Union Cabinet, both of which approved it. The President was also duly informed by the PM before he made his address to the nation.

There would be well be differences on whether the demonetisation was needed, and if there were shortcomings in implementation, however there was no slip-up in procedures. In any case, this issue of constitutional validity of the decision is already being considered by Supreme Court.

To therefore try to use the RBI Governor to score political points is extremely unfortunate. The present Governor, like most of his predecessors, understandably keeps a low profile, speaking when necessary. It is neither necessary, nor in fact advisable, for a Central Bank Governor to fashion himself as a Page 3 celebrity making controversial statements everyday as “evidence” of his independence.

Corruption in the banking sector over the years has been no secret. It is impossible for this sector to remain immune when general values in society were eroding. However, even people like me who have been associated with this sector for years, have I am sure been quite shocked at the extent of rot and greed in banking employees. For sure, the actual number of such black sheep is quite small from all indications, as compared to the total number of employees, and most of the employees have acquitted themselves very well during trying times.

As such feedback of wrongdoing came in, RBI was forced to react and issue some clarifications and make some modification in their notifications. This has understandably led to some confusion in the minds of the public. In hindsight that process could have been handled a lot better but given that an exercise of this size and scale has never been attempted before it was natural that there would be some leaning and correction as they went along.

In the coming days, we might well see many more officials getting caught and the law in that regard will take its course. Enough data and information has been collected by agencies for this to happen. However, it would certainly be prudent to ensure that reputation of banks in general and the RBI is not unduly affected. Banks will remain and will continue to play the role they are expected to in society and in the growth of the economy.


Law Enforcement and CBI

It has become fashionable to demand “CBI Enquiry” for any perceived or actual “scam” in any state. There are some Johnny-come-lately outfits like AAP which throw around allegations like there is no tomorrow, without providing any evidence, or even following it up with an FIR or court action. They too go the whole hog and demand CBI to investigate.

Every country certainly needs a central law enforcement agency. In the US there is the Federal Bureau of Investigation, the FBI. In the UK there is Scotland Yard. In India we have the Central Bureau of Investigation, the CBI. The CBI has done good work on some cases, and brought many criminals to book. They also have connections to international organisations like Interpol to assist when crimes cross national boundaries. However, if each case, for political reasons mostly, gets referred to CBI, then the organisations starts to get overburdened and the pace and quality of investigations suffers.

Each state has its own police force, some more efficient and less corrupt than others. The obvious starting point for any complaint that may arise would be to approach the local police station to file a complaint. This police station determines if they have the jurisdiction to investigate. In most cases, where special crimes are involved, the state authorities or police themselves may refer the complaint to the Economic Offences Wing, Crime Branch or the Cyber Cell. Police-setups in most states have such cells staffed by trained personnel equipped with the skills needed. Apart from this there are the special police stations and cells to take up crimes against women and children.

So why this sudden urge to handover almost every case to the CBI? One can understand if there is a crime which needs investigation in more than one state, where multiple jurisdictions are involved. Here it would make sense to hand it over to a central investigating agency like the CBI. Somewhat similar to the FBI in the US being called in.

Here it seems more of political escapism. Once the case is handed over to the CBI the state political and law enforcement establishment can throw up their hands and say it is now upto the CBI to investigate. “WE will cooperate fully with the CBI and want the truth to come out” is a common stand.  So does this work. In most cases, it just delays the process. With so many cases on hand, and inadequate staff, prioritizing cases becomes an issue for the CBI. On top of that, some of these cases also go to court in the form of Public Interest Litigation – PILs – filed by various individuals or organisations at the state or centre. This brings the CBI investigation into court glare, and often the court sets up special teams or court appointed committees to oversee the investigation. This adds one more layer of reporting and often interference.

As a result of all of this, law enforcement has become a convenient pass the buck situation. The local police heads loose authority, and in the process, respect of subordinates, demoralizing the force and reducing if not eliminating accountability at the local level. The local beat constable who is the mainstay of any force looses interest in investigating any major case, being quite satisfied with handling petty crime at his or her level. It is time this alarming situation is reversed and all concerned at the states and centre need to put their heads together for this.