Commercial banks by corporate houses

I would tend to differ with Mr Raghuram Rajan who has 'ripped apart' the RBI proposal to permit corporate houses to establish commercial banks

Mr Rajan may be a renowned economist and well qualified to offer his comment on the proposal. But , as a former commercial banker (practical banker), I am afraid his fears are misplaced. If proper regulations and restrictions are laid down,  while considering the proposal, which are STRICTLY implemented/enforced and the supervisory/regulatory role of RBI is played properly no corporate house will be able to play truant, i am sure. Even now each bank has its own credit policy involving caps for industry exposure, group exposure etc which acts as proper checks and balances . Role of RBI is to ensure that these covenants are properly followed. In spite of this, there have been instances where business houses have been able to siphon money from banks. So one can say that such things will happen when the stipulations are diluted on various grounds and when the regulator also turns blind eye to such dilutions.

With only one condition that the group entities should not be financed by the corporate banks , the fear expressed can be addressed, i feel. Problem is how far the management will be able to withstand the pressure and what devious methods will be invented to subvert such restrictions !

Electoral reforms

 Now that the local self government elections are expected to be held soon, in Kerala, i would like to urge the government and the election officer to consider the following suggestion to be implemented in the same, on merits.

As per the representation of peoples act persons who are holding office of profit with government or who are drawing emoluments from the government funds cannot contest in an election. Similarly as per the service rules covering the government employees including school/ college teachers, they are barred from entering active political life. 

It is observed that both the above guidelines are blatantly violated in the elections in general and local self government elections in particular. Many aided school teachers become candidates of political parties in the local self government elections, whereas lecturers from private colleges contest the assembly elections as party candidates. In both the above cases , the salary to these personnel are paid by the government and hence all the clauses of the service rules ( including bar on active politics) should be applicable to them and they should be disqualified to contest . Similarly, since they draw salary from government, they should be declared ineligible to contest on the ground that they were holding office of profit with the government . 

I hope the authorities concerned will look into this and take an appropriate action well before declaration of the local self government elections.