Forget CRR cut, Subbarao should cut down his humour
Is Duvvuri Subbarao, governor of the Reserve Bank of India, considering an alternative career in stand-up comedy? In July, Subbarao tried to lighten the usually grey world of central banking with a self-deprecating wisecrack, linking rising prices and his receding hairline.
“I must admit that even at a personal level, I do not know how to interpret inflation. Twenty years ago when I had a thick mop of hair, I used to pay 25 rupees for a haircut â€¦ and now, when I have virtually no hair left, I am paying 150 rupees for a haircut,” he said at a conference.
That’s harmless, and pretty funny. But on Tuesday, the governor went a step further.
In a remark that briefly moved markets, the governor joked about appointing a committee to debate whether to do away with the cash reserve ratio (CRR), just before his speech at one of the country’s largest and most prestigious banking events.
He said this in the backdrop of the SBI chief’s recent comment seeking a national debate on whether CRR should be phased out, which had drawn a sharp reaction from deputy RBI Governor K C Chakrabarty.
It’s a competitive world. Information moves markets in today’s sensitive times and investors, traders, money managers, journalists — all need news, some for themselves and some for their clients.
Reuters did not flash the comment, but some TV channels and newswires did.
Some might argue that journalists should have been patient before hurrying and snapping theÂ news, but when the chief of the
country’s top lender SBI has proposed the abolition of CRR, the RBI chief’s comment that a panel is being appointed will raise eyebrows.
Subbarao, who took charge in September 2008, has played a vital role and helped India tide over the financial crisis that began the same year. Breaking from tradition, the prime minister’s office extended his tenure by two years in 2011.
Bank shares did react to Subbarao’s comment, but luckily there wasn’t much damage. But now, Subbarao needs to think and decide whether he wants to be a comedian or a central banker. The two things don’t really mix.
(You can follow Aditya on Twitter at @adityayk)