In Pragati

June 4, 2008

I have an article on how finance is actually infrastructure and financial sector reforms¬†out in this month’s edition of Pragati. The link to the article gives you an excerpt and you’ll have to download the PDF version (slightly less than 2 MB) to read the full thing.

The article had a¬†checkered history. I had almost finished researching it when I suddenly had to dash to Delhi. When I returned to Bangalore I fell sick and told Ravikiran and Nitin I wouldn’t be able to write it after all. The fact that I had no furniture in this point and writing would have to be done propped up against a wall may have contributed. Then I came to Bombay where I had a guesthouse with a dsek, and called up and offered to write it after all.

By this time I was five days over deadline and had to write it in a mad rush between ten and two in the morning at my guesthouse. The next day I had to check out of the guesthouse and didn’t have a new one to shift to, so I finished the article between noon and three in the afternoon while squatting in an unoccupied cabin next to an FX dealing room. Sadly, I had finished the bit about currency markets and was writing about financial inclusion and regulation by then.

Anyway, the result of all this was that I wrote the article in practically stream-of-consciousness style. As a result, not only was it a week over deadline, it was 1200 words over the word limit. It is a tribute to Ravikiran’s mad editing skillz that the article is now within the limit and still readable.

Regulation, Zamindari, and the Jagadguru

November 6, 2007

The Jagadguru says:

What I am against is the deregulation of the banking sector. Cutting off or weakening the regulatory arm is not good for the country. Letz have private players, with a strong regulatory body, under the control of a democratically elected government. I think this will ensure the best of both worlds. We will have private players in the industry bringing in the much needed competition (and hence better service) and we will also have strong regulations ensuring that needy people are not sucked out of their blood.

The only way to stop such misuse is by having strong regulations on the market. Only strong regulations can stop ICICI kinda atrocity or zamindari system.

The RBI had come up with a regulation against employing goons or intimidation for collections two years ago. But ICICI kinda atrocity wasn’t stopped. Why is this?

Dumbhead free market fundamentalists will tell you it’s because regulation makes honest people overcautious while not changing the behaviour of rogues. But they are wrong. The true reason the strong regulation failed was because K V Kamath has not let the Jagadguru into his heart. When he surrenders himself to the Jagadguru, ICICI Bank will be transformed, and so will its outsourced collections agencies.

Even strong regulations are useless if we do not surrender ourselves to the Jagadguru.