Tuesday, November 24, 2020

Banks and Business Houses

 RBI seems to be considering permitting NBFCs and large corporate / industrial houses to promote new commercial banks. This has been described as a 'bombshell' by Raghuram Rajan and Viral Acharya. They argue that such houses are themselves big borrowers and we cannot expect them to choose good borrowers and therefore credit quality of banks would suffer.

This criticism is debatable and is one-sided. Though it is fashionable to condemn large industrial houses as purveyors of corruption and spewers of malpractices, facts do not bear this out. Fourteen banks were nationalised in the year 1969. Prior to this, many of these had been promoted by industrial groups. Central Bank of India, UCO Bank, Indian Bank and Indian Overseas Bank had industrial houses as their promoters. They were doing well; therefore, the government did not have any problem in managing them. They became sloppy and corrupt subsequently because of political interference.

The private banks which went under had been promoted by 'eminent bankers'. Global Trust Bank (Trust was an oxymoron here) and Yes Bank (Yes for mismanagement?) were the babies of Ramesh Gelli and Rana Kapoor, both banking doyens. They got banking licences because they were professionals and not industrial / business magnates. They taught industrialists how to be corrupt!

Thus there are examples to show that the problem is not with industrial houses. It lies elsewhere. If potential promoters are not subjected to strict due diligence, whoever they are, banking mishaps will happen. Industrialists at least know the difficulties faced by businesses and as bankers they will not be indifferent to customers. To dismiss them as fraudulent as a group is a sign of unpolluted prejudice.

RBI's former Governor and Deputy Governor could have proposed better due diligence before sanctioning licences to open banks. Unfortunately they have chosen to mouth populist condemnation of businessmen and industrialists. This goes to show that what is ailing us is a closed mind. Any attempt to open it will spontaneously evoke cynicism and contempt.

Saturday, November 14, 2020

Barack Obama on Manmohan Singh

 Barack Obama's memoir 'A Promised Land' promises some confusion also. His observation on Manmohan Singh is as inscrutable as the latter's face.

There is no disputing the fact that the former prime minister of India was poker-faced. He was impassive. He was also considered to be a person of integrity. This of course is not an undisputed fact. He trivialised the unethical conduct of his ministers as the consequence of 'coalition dharma'. He could easily put up with the shenanigans of both his ministers and his leader. At least to that extent, his integrity was diluted and doubtful.

Barack Obama, according to pre-publication reviews of his memoir, says that Manmohan Singh possessed 'impassive integrity'. Does this mean that Singh does not wear his integrity on his sleeves? Integrity cannot be opaque. It is transparent if it exists. If it is hidden or if it is sought to be hidden, it does not exist. Crooks hide dishonesty. Nobody can hide one's honesty. So this interpretation of Obama's enigmatic (impassive?) comment does not lead us anywhere.

Is there a printer's devil? Does Obama simply want to say that Singh is known for his deadpan expressions and also integrity? Maybe yes. It is not only that MMS is inscrutable but any characterisation of him also ends up being incomprehensible. Obama is known for clarity of thinking and ease of expression. Manmohan Singh has confused him!

Friday, November 13, 2020

Barack Obama on Rahul Gandhi

 Barack Obama is considered to be a sensible politician. Of course, he has the advantage of being compared with other American politicians. Obama has now proved that nothing prevents a sensible person from making inappropriate comments.

Obama has, in his autobiography, referred to Rahul Gandhi as someone who is unformed, nervous and lacking in passion and aptitude. These are all subjective remarks which do not do justice to Obama's sensibility.

Everyone is unformed in the sense that everyone keeps evolving. If Obama considers himself as 'formed', it means he refuses to grow further. No one can claim that one has reached the zenith of growth. When meeting Obama, Rahul would have been overwhelmed by protocol requirements causing him to be nervous. Probably, Obama lacked the ability to put Rahul at ease. Passion and aptitude cannot be measured easily even by experts. One wonders why Obama has chosen to be so pretentious.

The Congress party has matched Obama in lack of maturity. "These are only Obama's views." Obama says these are his views.

Thursday, November 05, 2020

Arnab Goswami

 Arnab Goswami of the Republic TV is a thorn in most politicians' flesh. It is natural for the targeted politicians to be desperate to put him in the dock. The Maharashtra government which has been at the receiving end for quite some time is anxiously trying to silence him.

The government has been clutching at any straw to browbeat the inconvenient TV anchor. It tried to pin him down in the TRP case. It has not succeeded so far. The government has filed FIRs against each and every employee of this TV channel. The employees have not started squealing against Arnab, further infuriating the government. So the government started reopening a closed case (in which he was accused of being responsible for the suicide of an interior designer) against the crusader.

The government wanted to take him under police custody and teach him a lesson. But the Chief Judicial Magistrate in Alibag, Maharashtra did not oblige; he denied police custody because in his judicial view 1) Arnab Goswami was not clearly connected with the victim's death, 2) No court order was issued for the present investigation, 3)The prosecution has not shown any defect in the earlier investigation, 4) No magistrate has permitted reopening of the case.

But revenge brooks no opposition howsoever lawful the latter is. The government will continue to go after him. Various organs of the media have been unfair to him. Most of them have chosen to be silent, perhaps relishing their competitor's plight. Even the few which have opposed the unlawful treatment meted out to Arnab have done so perfunctorily to avoid being criticised for not standing for one of their own.