Bank heist......

Short of sticking the Red Flag atop RBI Towers, the RBI governor Dr. Raghuram Rajan has said everything a Red thinks. Corporates are not to his liking; well they are not to anybody's liking. They have bilked banks, owned mostly by New Delhi -- always a trusted friend of corporates.  Can Dr. Raghuram Rajan go beyond tough words when bank chairmen have to respond with invisible favours to corporates; the entire process of appointing bank chairmen is a manner of fixing, something like selection of the Indian cricket team; and many bank chairmen get a corporate board posting after retirement. Dr. Rajan is aware. There is Mr. Arun Jaitley boasting of Indian growth on the back of a near-bankrupt banking system. Recap funds have been promised; recap funds are taxes on depositors who have lost their deposits, to begin with; yet, again, corporates do not pay up; depositors do, they have no choice. What is Dr. Rajan's dream for RBI? Am not sure whether RBI governors have unknitted their dreams to the public? Banking is run like Indian cricket; BCCI and New Delhi know all about interest conflicts. BCCI has not punished any; New Delhi ditto. Both will not change, have little credibility. New Delhi and RBI will deny strongly. New Delhi owns RBI, owns most of the banks, owns the Finance Ministry. Can then RBI and RBI governors, dare to dream? Has India's best icon, Rajan, a dream for RBI?; perhaps, he may be having nightmares. Dr. C. Rangarajan, the RBI governor, allowed banks to set deposit and lending rates; he also talked of a 4 per cent per annum bubble in prices, today's inflation targeting. And most importantly, RBI allowed staff to have a view on every aspect of finance; there were discussions with Dr. C. Rangarajan, taking the final call. Fair enough. And he had Dr. Manmohan Singh as Finance Minister, who believed every issue has many faces. Economics has many truths, not one. Ahead of credit policy, Dr. C. Rangarjan met all -- marketmen, industrialists, academics and his own troop of officials. That habit perhaps fell through the 18 th floor window of RBI Towers. Dr. Bimal Jalan, in a public speech talked of government holding in banks at an unchanging 40 per cent with the rest in public hands; it made sense; those were Vajpayee days and the Finance Minister Yashwant Sinha agreed; anyway Yashwant Sinha did not meddle unlike Pranab Mukherjee, P. Chidambaram and Arun Jaitley. Vajpayee lost the elections. Bank remain under New Delhi. Jaitley wants to take away the debt powers from RBI; a Monetary Policy Committee to decide interest rates; one is not sure if RBI will have veto powers. Dr. Raghuram Rajan has been brilliantly ambiguous; he talks of  New Delhi and Mumbai making up; making up what? Sir, again, what's your RBI vision? An Utopia worth sharing. Do you think the banking system will get off the bed with New Delhi spannering every nut and bolt? Should not banks report to RBI, none else? Should not RBI be responsible to the Lok Sabha and none else? Should not RBI be certified the first and last Dissenter in the financial system? Will India always have high growth, bust banks and Red flags?