Reserve Bank of India Governor Raghuram Rajan has challenged the staff to improve the work culture at the 81-year old central bank, with less bureaucracy, more communication and openness to outside thinking, and improved compliance.
“The imagery that comes to mind for critics is of a traditional unimaginative organization rather than a dynamic intelligent one,” Rajan wrote in a memo to the RBI’s 17,000 staff seen by Reuters.
“Our regulations are not always very clear. Our staff sometimes is neither well informed of our own regulations nor willing to help the customer. Our responses are occasionally extraordinarily slow and bureaucratic,” he added.
Rajan also expressed concern that the RBI was not seen as enforcing compliance, saying that in India “we do not punish the wrong-doer – unless he is small and weak.” The RBI regulates the country’s currency and debt markets, as well as the public sector banks.
The memo challenged staff to improve its performance standards through an appraisal system that better rewards top performers, while urging staff to improve communication among employees.
Rajan, former chief economist at the International Monetary Fund, also expressed some staff did not display enough curiosity about areas outside the RBI, urging workers to read outside sources and learn about “the wider world.”
“This has to change if the organization is to remain vibrant. In complacency and self-satisfaction lies a slow descent into mediocrity,” Rajan wrote.
Rajan also reiterated the need to hire people from outside the RBI to improve the quality of research in the central bank, a subject that is traditionally controversial in public institutions in India, where seniority is traditionally the determinant for promotions.
Rajan three-year tenure is set to end in September, though markets are awaiting to see if he will be re-appointed for an additional two years.