“If the rule book … is so complicated that a PhD will need a few years to figure it out, the fault lies not with the customer but with us.” That sentence in an internal memo Reserve Bank of India Governor Raghuram Rajan sent to top and middle-level executives on Thursday sums up the change he wants to see in their mindset.
In the unusual letter, the Governor challenged the central bank’s practices, calling on officials to focus more on customers, be open to ideas and keep costs on a tight leash. He also called on the bank’s staff to be professional in their approach: “Responsibility does not end when you have passed the file on, it ends when the task is complete — in other words, when the organization delivers.”
Rajan began on a softer note, commending the effort that went into the event marking the bank’s 80th anniversary, in Mumbai. “This event, and sundry other experiences I have had at the RBI, show that when we put our mind to it, there is very little we are not capable of.”
Unfortunately, he said, “not every action we undertake has the same level of professionalism and quality”. He then went on to share his thoughts on what could make a difference.
‘Keep it simple’ The regulatory regime, he said, should be simple and customer-centric. “…could we look ahead, recognizing that the worst possible applicants usually are clever enough to evade the traps we place for them, while ordinary applicants get enmeshed in the red tape?”
Sometimes, he said, “the problem is not with the rule itself but with poor drafting and communication”. Potential applicants should be asked to read a circular to see if it is clear. … A senior officer should be designated to make all stakeholders understand such circulars, he added.
Rajan called for a mechanism for a free flow of ideas. “…many of our young officers have a fresh take on the operational work they are engaged in. Do we have adequate systems to get their inputs on what works and what does not, as well as ideas on how to change? …what mechanisms do we need to put in place?”
The RBI governor also called on staff to be proactive in responding to communications, citing the approach of his former colleague, Professor Eugene Fama (University of Chicago). “No matter how lowly the student or faculty who gives him a paper to read and comment on, he delivers it back marked up within a few days, at most a week. This, despite the fact that he is over 70 years of age, has won the Nobel Prize, and he really has no favours to curry.”
Cost control Rajan also called on the staff to help the RBI eliminate needless costs. He cited a simple example: “I have seen a variety of RBI pens and pads across the offices. Do we need to give a pen and a pad for every meeting?”
He added: “Do we need to print expensive in-house magazines? Can we instead put them on line? Similarly for greeting cards and calendars?”
“I am sure you will find much to debate about the views I offer even as I challenge some of the practices in our institution,” he said in conclusion. “My reflections come from a relative outsider seeing what we are capable of…”