I am sure Mr Rajan must have been fed up with the lists of “Do” s and ” Don’t”s received from various ,( and most of them from very respectable) levels . But such a fear should not and could not prevent me from penning a few issues which I think are relevant. Many issues may not be directly under his scope and command, but I am placing them since they do affect his performance and he certainly has an access to the relevant corridors.

So here we go

1.. We need to play from the front foot and need to be aggressive in ensuring a healthy spread of banking culture particularly among rural and marginalized urban population

2.. Believe it or not, but let us admit that Indian Banks and RBI have done a commendable job in keeping all our Commercial banks afloat. Their a bit conservative attitude has kept us away from the massive typhoons of Derivatives of umpteen levels ( unlike USA )

3.. Co operative Bank segment needs a serious fresh look. The cooperative sector needs massive amendments in the Act itself to keep them away from Political/ unprofessional interventions .
I think this sector, if professionally and carefully monitored, can ensure a widwer spread of banking culture

4.. The Banking sector needs enhanced capital support to keep its spread in affordable limits and to meet the inevitable NPA pressure due to the slow down ( I assume NPA created due to corrupt practices will be severly dealt with)

5.. The Agro financing and MSME financing is so crucial , but for obvious reasons of weaknesses of the sectors, the banks have taken a very lukewarm interest and provide more lip services rather than actual finance. Actions and some initiatives need to come from both the sides of the table. Be clear that the ball at this point of time appears to on a No Man’s Land .

A few ones can be added, but let me post at least these as a starter !

The role of Finance Intermediaries, Analysts , Consultants and the Funds Managers is under the public scrutiny ..the author feels ..”rightly so !!” We all have lost faith in many of them ( am keeping some exceptions, to prove this statement !!)

There is no doubt that a vast number of investors have lost a huge amount of money during this financial turmoil, which still continues,unabated .
Naturally the blame game has started.
Coming straight to my topic,I feel that the financial intermediaries ought to have alarmed the concerned investors, quite effectively , to the fact that there lies a clear wasted interest or there are clear signals that point towards a steep fall in Re value and stock prices at all levels however , they hesitated probably because they had vested interest to see that the stock prices swell and keep swelling The Incentives , Bonuses, ESOPs etc all drew he tangible benefits from the extra fat that the equity prices gather

As far as $ Re values are concerned, they have proved quite novice and poorly researched all throughout.
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Similarly , the entire machinery that participated and controlled the money markets and the stock markets, also could not see beyond their own self interests of a short run .

The bail out packages also , if and when announced, interestingly , will put higher tax burden on the common investors .

The entire system needs to be revamped. There can not be a reliable cure coming from the quarters which itself is manned by the experts who themselves are the cause of the problem . The real great traitors are those who played a “YES Sir “approach since they were more than happy receiving their swelling pay packets!!

Any rejoinders?/ !! Please .

A lot is being said about the way the Rupee is falling almost every day. The Finance Ministry , the RBI and most of the Economists appear quite clueless.

Various reasons are being rolled out from various corners .Starting from…politicians are planning to bring back their stacked Foreign Currencies, the US market is looking up , so the FIIs and other PE investors are transferring their investments from India to US or Euro zone ,the trade deficits are mounting , and so on.But the single biggest factor, to my mind is …the fast melt down in the Confidence level in the Indian Economy and particularly in the ability of our Governing system, which is muddled with corruption ( which is now spreading like a virus in almost all walks of life) For various international agencies and investors, India is a Gone case, the India is no more shining and it is like a fast fading light, which sparkled for a few years and the economy will soon find its comfort zone in the Elephant rate of growth( 2 to 3 % )

There will however be a boom in earnings for the exports, but that will not last long and their competitive advantage will be wiped out by local inflation and parallel reduction in currency values of competing export countries.

The local industry, which is so much used to depend upon imports , along with the consumers of Imported items, will find the going tough. But the worst hit will be the Corporates who have merrily borrowed in Foreign currencies.

I will not be surprised if a good number of our industrial units fall into the lap of overseas strategic investors .

So what is the solution? …. For that let me think and say something in my next blog !!