D Subbarao, former governor of the Reserve Bank of India speaks at length with Govindraj Ethiraj on his term during the global financial crisis, shoring India’s finances and the tight-rope walk that most governors have to do when dealing with the Central government.
Duvvuri Subbarao served as the Central Bank’s governor for two terms and he helped the Indian government navigate rocky times in his tenure.
Subbarao says progressive and continuous work by successive RBI governors ensured that India could weather the global financial crisis but not anticipating corollary problems saw the valuation of rupee go through turbulent times.
On being asked on the current RBI governor Raghuram Rajan’s stance on cleaning up the banking system and disclosure of non-performing assets, Subbarao admits that, “the scale of the problem was not anticipated but I would probably have done the same thing that Rajan has.”
Subbarao makes a strong case for the independent decision making ability of the Central Bank, “We should always listen to the government because it is the government but that does not necessarily mean that we(RBI) have to change our stand because of the government.”
The former RBI governor also talks about introducing standardization in the functioning of the country’s monetary policies as well as the impact that financial technology is having on the Indian populace.