Prime Minister Mody reportedly asked Indian bankers to end 'lazy banking'. Now the Reserve Bank is again reported to echo similar sentiments.
The commanding heights of the banking sector are with the public sector where Pareto's Principle applies insofar as 20 percent of the staff do 80 percent of the work. The rest are akin to Government bureaucrats who have written an exam and attended an interview and can therefore not be sacked at all. They continue to come to office and may do some, if any work. Rampant unionization and rampant politicized corruption under various regimes point fingers at a rapidly deteriorating state of affairs. Top Managements have been largely paper heroes. They seem to bide their time looking for lucrative post retirement jobs.
The Reserve Bank is now angry with the commercial bankers as they have choked the monetary transmission mechanism. Bankers have hesitated to pass on the 25 bp cut. Only 3 banks have reportedly cut corresponding rates. Banks are perhaps holding back , thereby pressurizing the Reserve Bank to cut another 50 bp at least before the transmission mechanism is put through.
The Reserve Bank really seems out of tune with the commercial bankers. Commercial bankers are at the heart of the system; the top cannot be detached from the heart. The rise in NPA and the now the failure of pass through in the monetary transmission mechanism reveals how the Reserve Bank has been so out of touch with ground realities,
Without risk and responsibility.
The commanding heights of the banking sector are with the public sector where Pareto's Principle applies insofar as 20 percent of the staff do 80 percent of the work. The rest are akin to Government bureaucrats who have written an exam and attended an interview and can therefore not be sacked at all. They continue to come to office and may do some, if any work. Rampant unionization and rampant politicized corruption under various regimes point fingers at a rapidly deteriorating state of affairs. Top Managements have been largely paper heroes. They seem to bide their time looking for lucrative post retirement jobs.
The Reserve Bank is now angry with the commercial bankers as they have choked the monetary transmission mechanism. Bankers have hesitated to pass on the 25 bp cut. Only 3 banks have reportedly cut corresponding rates. Banks are perhaps holding back , thereby pressurizing the Reserve Bank to cut another 50 bp at least before the transmission mechanism is put through.
The Reserve Bank really seems out of tune with the commercial bankers. Commercial bankers are at the heart of the system; the top cannot be detached from the heart. The rise in NPA and the now the failure of pass through in the monetary transmission mechanism reveals how the Reserve Bank has been so out of touch with ground realities,
Without risk and responsibility.
No comments:
Post a Comment