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Rajan open to filling up RBI posts with outsiders

business Updated: Jan 19, 2016 01:24 IST
HT Correspondent
Raghuram Rajan

Reserve Bank of India (RBI) Governor Raghuram Rajan speaks during a news conference in Mumbai.(Reuters)

Reserve Bank of India governor Raghuram Rajan plans to hire new talent from outside the central bank for some areas even as he tells his staff to reform the 80-year old “traditional unimaginative” lender into a more “dynamic and intelligent one”.

In a 2,500-word letter to the RBI staff on the last day of 2015, Rajan said: “While we will look for homegrown talent where possible, we need lateral entry in some areas — provided internal people have a fair chance to compete for the jobs. ”

Rajan spoke about maintaining vibrancy within the institution and called out the rot within the RBI cautioning all 17,000 employees to come out of complacency and self-satisfaction where lies “slow descent into mediocrity”.

“As I sit through promotion interviews, I am worried that people are losing curiosity, the desire to learn and improve themselves. I am concerned that some people do not read outside the papers that come across their desk, that they have no idea of other branches of the bank and their work, let alone the wider world…We emphasise specialisation, but that does not mean there is no need to read the newspapers, let alone magazines and books. This has to change if the organisation is to remain vibrant,” read the letter that came across as a stern message to improve the bureaucratic culture of the organisation.

“We have received letters from previous governors too, but under him (Rajan) we are continuously guided by his wisdom and it’s always good to get guidance from a person of his stature... He wants to change the manner in which this age-old institution works,” a senior RBI official said.

Reiterating the RBI’s stance on punishing rule breakers and defaulters, the RBI chief stated: “…No one wants to go after the rich and well-connected wrong-doer, which means they get away with even more. If we are to have strong sustainable growth, this culture of impunity should stop. Importantly, this does not mean being against riches or business, as some would like to portray, but being against wrong-doing… Are we allowing regulated entities to get away year after year with poor practices even though these are noted during inspections/scrutinies?”

Known for his pointed and witty remarks in public, Rajan minced no words to say, “Unfortunately, our performance evaluation system did not help us identify who needed motivation and improvement, and how they could be helped to do so…We need to change this, to reward those who perform and to help those who do not.”

According to him, the RBI staff sometimes is neither well informed of its own regulations nor willing to help the customer, its “responses are occasionally extraordinarily slow and bureaucratic. The imagery that comes to mind for critics is of a traditional unimaginative organisation rather than a dynamic intelligent one”.