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.