I was pressurised to take up RBI Board position: S Gurumurthy

CHENNAI: Chartered Accountant and Editor of Tamil political magazine 'Thuglak' S. Gurumurthy said he was pressurised to take up the board position in the Reserve Bank of India (RBI).

Gurumurthy told this in an email to the All India Bank Employees Association (AIBEA) General Secretary C.H. Venkatachalam and also dared the latter to share the mail with the Union members.

As a post script in his email, Gurumurthy told Venkatachalam: "You all think that me being in the RBI Board is a big thing. I was pressurised to take up that position as there were not many to put a counter view in the RBI Board."

"I did not need it nor did I seek it. For decades I had never taken any position in or from the government. Nor will I ever."

"Me, in the RBI Board, was criticised by the Financial media in the West, and I am happy you a communist share their views now," Gurumurthy added.

Continuing further. Gurumurthy said he had never allowed anyone in any public fora to state that he is on the RBI Board in the introductory remarks.

"You have expressed grave concern about me being on the RBI Board. You may not know that if I am not on the RBI Board it makes very little difference to me," Gurumurthy said.

Gurumurthy wrote to Venkatachalam in response to the latter's message in social media condemning him for his comments at Thuglak magazine's annual function about the public sector bankers.

Speaking at the Thuglak magazine's annual function, Gurumurthy had said the public sector banks are losing talented officials to the private sector owing to poor pay and lack of freedom.

"Only scums and filth are remaining with public sector banks and with them, the country has to compete globally in the financial sector," he had said.

Gurumurthy also said that till the government has majority stakes in its banks, it is not possible to encourage talented staff.

Reacting to that Venkatachalam said: "We strongly condemn his uncalled for comments and demand his immediate apology. He is unfit to be on the Board of RBI and the government should remove him from this important post."

Gurumurthy in his email to Venkatachalam said: "I would not have written if I had not known you and you had not invited me for the AIBEA workshop. Your post has started a campaign against me."

Stating that many campaigns were made against him earlier Gurumurthy said: "I have never bothered about the campaigns against me by any, as I don't belong to any party, nor seek or need anyone's courtesy, by the grace of the Divine I believe in. So this is not to answer any campaign."

"I have always opposed and will continue to oppose privatisation as I believe with all faults majority bank assets in India have to be in state hands. The Indian economy will be ruined if the major part of the financial sector falls into private hands with the expansion and contraction of the Rupee dependent on the Dollar," Gurumurthy said.

"I resisted within RBI all efforts to pressure the government to privatise when the previous RBI governors were in command," he added.

As regards his speech at the Thuglak magazine's function Gurumurthy said the UPA government's policies of letting huge FII investments into the stock market led to indigestible money in the system.

To lend that money the government brought down the customs tariffs to zero for capital goods to attract the industrialists to borrow from banks.

Gurumurthy said the government persuaded the industry to go for huge expansions in the hope that India would turn into a high growth export driven economy.

According to Gurumurthy, the huge recession that followed 2008-09 made the investments of several lakhs of crore junk and the monies lent, NPA (non performing asset) and which was also later accepted by former Governor of RBI Raghuram Rajan.

"That is where the woes of the PSBs (public sector bank) started. Not a single political party, including the BJP and CPI-M or the bank unions spoke the truth about the source of the NPA trouble. The guilty finance ministry officials who ran telbanking were mixed up with both the UPA and NDA governments, to suppress the truth," Gurumurthy said.

Continuing further he said, the NPA issue, action against it by the Central Bureau of Investigation (CBI), Central Vigilance Commission (CVC), the prudential norms completely shook the bank officers.

"This gave a huge opportunity to the private banks and funds which had a heyday because the best loan accounts shifted to them. They began giving high salaries and attracting capable PSB officers," Gurumurthy said.

As a result, several capable officials left the PSBs and he had termed the remaining officials as 'kazhisadai' meaning leftovers or those who could not pass through the filter, remained inside.

"It is a fact and I stand by it," Gurumurthy said.

Referring to the decline in share of PSB loans in the total banking sector loans Gurumurthy said: "At this rate the PSBs need not be privatised. They will get so marginalised that they will handle only the government and municipal accounts and all corporate accounts will be taken over by private banks. That we are not having and not generating and training the needed talent in the PSBs to handle 60 per cent of national savings that gets into the PSB is indisputable. It is a matter of concern for all -- government included," he said.

"If you are a responsible trade unionist you will be concerned, talk about this and not play petty politics. I wrote this because you had invited me to talk to AIBEA and you know our views converge on PSBs in many ways," Gurumurthy told Venkatachalam and also asked whether he has the guts to circulate his mail to AIBEA members.

"I will not make this public unless you do it. If you do it, have the courage to publish it in full," Gurumurthy said.