Money & Banking

S.S Tarapore: Doughty defender of the Old lady of Mint Street

N.S. Vageesh | Updated on January 19, 2018

S.S. Tarapore, former Deputy Governor, Reserve Bank of India (file photo).

S.S. Tarapore, former Deputy Governor, Reserve Bank of India (file photo).

His credentials as a ‘monetarist’ and a ‘hawk’ ensured that all RBI Governors sought his advice across the years

Old soldiers never die, they just fade away, runs an old army ballad. One was tempted to use that comparison when it came to S.S.Tarapore, the redoubtable former deputy governor of the Reserve Bank of India. Except, that it is not true. He died this morning. He was 80. And no, he didn’t fade away – as so many other grey eminences do, when they retire.

A career central banker, Tarapore joined RBI as a research officer in 1961 and demitted office as Deputy Governor in September 1996. The past twenty years have seen few men lead such a crowded and active life, post retirement. He lectured and wrote prolifically – across papers, over the years. He was particularly fond of this paper and wrote his fortnightly columns continuously from November 2008. His professionalism and punctuality were an editor’s delight. Even while responding to a request for a comment on some development, he would be prompt and precise. He was a delight to listen to and although frail in his last few years, his mind was as sparkling as ever. He had an old world courtesy and charm even as he minced no words. His language, bearing and demeanour always let you know that he would brook no nonsense. His last column,due shortly, had already been sent by him from his hospital bed.

For the last so many decades, both in office and outside,he remained a strong defender of the RBI and its autonomy. Every attempt by the finance ministry to encroach on its independence met with his stern disapproval. From the pulpit of his columns, he conveyed his displeasure with well-marshalled arguments – but always in elegant and restrained language.

His credentials as a ‘monetarist’ and a ‘hawk’ ensured that all RBI governors sought his advice across the years. He chaired two eponymous committees on capital account convertibility that lay the benchmarks for what the country needed to achieve before its currency could achieve total convertibility. He was a trenchant critic of the Financial Sector Legislative Reforms Commission (FSLRC), which he felt, sought to downgrade RBI’s role (vis-à-vis other regulators, through a variety of subterfuges. In his mind, there was no confusion about where the RBI stood and why it was necessary to respect its status.

He was never afraid to go against the grain – especially against the never-ending lobbying to cut interest rates. He repeatedly cautioned RBI governors against yielding to this clamour. He pointedly said in his columns that if rates remained indefensibly low for an extended period, then they would have to be raised disproportionately high later on – and rapidly. That seems like a cry in the wilderness now, especially in these days of repeated quantitative easings and other central bank excesses. Perhaps the US Fed had better keep this bit of advice in mind as it unwinds its past actions.

His passing is a loss to the banking fraternity, but most of all, to those who cherish the need for an autonomous central bank.


A well-regarded central banker

SS Tarapore was an extremely well-regarded central banker, particularly in the areas of economic research and monetary policy.

His contributions as a member on the two Narasimham Committees set the tone for first generation reforms in the financial sector. The roadmap he enunciated for India’s journey towards capital account convertibility in the report of the Committee on Capital Account Convertibility of which he was the Chairman, though much criticised initially, was accepted later by the world as the way to go on the road to convertibility. The Reserve Bank will always remember Tarapore fondly and will be guided by the inspirational example he set.

Raghuram Rajan, RBI Governor

Crusader in fight against inflation

SS Tarapore was one of India’s outstanding central bankers. His long career in the Reserve Bank was marked by several achievements. He believed strongly in the power of central banks to influence the economy. He also believed that the dominant objective of the Reserve Bank was price stability both in the short run and long run. He may be called a crusader in the fight against inflation. He did not mind being branded as a ‘hardliner’ in this respect. After his retirement, he had been active writing on issues relating to monetary policy, financial system and the economy in general. The Indian financial system has a lost a valiant fighter in the cause of price stability.

C Rangarajan former Chairman of PMEAC and ex-RBI Governor

Honest and meticulous

Rarely would the future generation know that a man of such stature had walked the corridors of the Reserve Bank of India.

Tarapore was an honest and meticulous person, who would not even take a paper pin from the office stationery for his personal use.

He was also a highly-principled man, who was like a conscientious keeper of the RBI and the nation.

Usha Thorat former RBI Deputy Governor

Published on February 02, 2016

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