Below the line: Battle royale

With DEA Secretary Subhash Chandra Garg mocking RBI Deputy Governor Viral Acharya for his “wrath of the markets” remark, all eyes are now on the November 19 Board meeting of the RBI. More sparks are expected to fly on that day, given that Garg is also member of the RBI Central Board.

For MSMEs, the Centre’s recent push for easier credit flow to them has been a godsend. However, many bankers’ rue in private that loan melas are back, but this time in digital form.

The new digital initiative of sanctioning MSME loans up to₹1 crore within 59 minutes has raised eyebrows. Will loan sanctions get the necessary due diligence in 59 minutes?

Can you decide in 59 minutes whether to give a loan to a person without doing complete due diligence, queried a banker. What if the loan goes bad and the money doesn’t come back after couple of years — will you make the person (who was at the time of sanction) accountable or expect the machine (portal) to do recoveries on the bad loans?

Is this written as part of the 59 minutes scheme, wondered this banker.

The 59-minute sanction may put banks in a spot, but it certainly going to help MSMEs and the ruling dispensation.

It’s a no brainer that the RBI and the government are not on the same page on the ticklish issue of the ideal level of capital requirements (prudential capital norms) for Indian banks.

The RBI is seeking to paint a picture that government is keen on a “dilution” or “relaxation” of the current capital requirement norms. On its part, the government feels that there is no case to continue with a set of norms that are higher than the global standards (Basel III requirements).

So recently when reporters quizzed DFS Secretary Rajiv Kumar on why the government wants RBI to relax the norms, pat came the reply from a seasoned bureaucrat — “Let me make it clear once and for all. You (media) should understand this. There is no case being made by government for dilution of capital norms. What is being discussed here is where is the need for India to have norms higher than the global standards. So why not bring our norms on capital requirements on par with the global standards?”.

Well this is craftily put, but the outcome of what is desired to be implemented will only reset the credibility of Indian banks in international markets, quipped an official from RBI. The merit, it seems, lies on both sides.

So the key takeaway for bankers, who are caught in the crossfire, is that the RBI is in no mood to budge and the government is hell bent on stamping its authority on the central bank.

Indian Institute of Technology-Delhi is keen on an image makeover and wants to add a dash of foreign colour to its functioning. The reason is not far to see.

This Institute of Eminence has scored zero in three out of the six parameters that determine how “internationalised” the institute is in the eyes of the international community.

The three parameters being number of international students in the institute; the number of foreign faculty and the overall student-faculty ratio. On all these three fronts, IIT-Delhi fared badly. The good news is earnest efforts are being made to correct the situation and more international universities are being wooed for collaboration.

Our Delhi Bureau

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