Though its largely a story of hopes as yet....but a confidence generating start. The moves outlined are good too ...more important ones to follow
His speech, coverage , fresh ideas and talk of transparency and predictability were confidence boosting & the markets moved up decent..banks huge...rupee strengthened a bit !
the take aways that give me confidence are -
- he didn't start on the back foot..rather with confidence on the front
- he emphasized the importance of : transparency and predictability in difficult times while keep the door open for any call..this is significant
- he tackled some imp structural issues and also refrained to take big bang steps on monetary policy in the first speech...thats being mature
- developing banking , its reach, inclusion of entrenched foreign banks etc
- he covered banking licenses...will be given soon and
- they involve developing fin markets, easing money supply, addressing credit, recoveries,
- Interesting Rupee internationalisation
- incentives to banks for credit & FCNR till 30 nov 2013 ..should see good inflow in short run
- in the same breath he also questioned why owners should be in control where organization mismanaged & loss making
organizations will not be allowed to capitalize via banks
- in my opinion, FT should also get worried re NSEL & even MCX later on..having mismanaged one...they may most likely lose them
- Exploring Mobile payments big time as increase increase white / 3rd party ATMs for great reach...
the closing paras were very interesting ..
1..... short term time table for the Reserve Bank. It involves considerable change, and change is risky. But as India develops, not changing is even riskier. We have to keep what is good about our system, of which there is a tremendous amount, even while acting differently where warranted. The RBI has always changed when needed, not following the latest fad, but doing what is necessary.....
2. Finally, a personal note: Any entrant to the central bank governorship probably starts at the height of their popularity. Some of the actions I take will not be popular.
The Governorship of the Central Bank is not meant to win one votes or Facebook “likes”. But I hope to do the right thing, no matter what the criticism, even while looking to learn from the criticism
All the best Guv !!
