An encounter with Urjit Patel

Shivkumar C

IT was a chance encounter in 1994. The venue, the office of the Discount and Finance House of India (DFHI), an institution created to provide liquidity to India’s money market instruments. (DFHI was taker over by the State Bank of India in the early 2000s ). The DFHI office was located in the Reserve Bank of India’s building, Rafi Marg, New Delhi. I was then a journalist with the Business Standard. I had gone to DFHI to meet the chief dealer.
 
I normally had a free wheeling conversation on bond yields, forward premiums and other mundane topics with the chief dealer with whom I enjoyed a friendly rapport, that continues to this day. It was also the aftermath of India’s near insolvency that was averted by an IMF Structural adjustment facility loan in 1991. India was still repaying that loan, though government prepayments had exerted liquidity pressures in the money market.

It was while talking on these topics that Mr. Urjit Patel, the newly appointed governor of the Reserve Bank of India, then resident representative of the IMF walked into the DFHI office with a prior appointment. It was exactly at that time that several public sector banks had entered the money market looking to raise rupee liquidity. The spike in the yeilds occupied the attention of the Chief Dealer. Obviously, for the Chief Dealer, his job that sustained his family came first.

The young Mr. Patel, armed with IMF employment, was unmindful of those sensitivities. Perhaps for Yale trained IMF carbineries, exceptionalism is the rule, disrespect and arrogance are virtues. Few are sensitive to the rest of the country’s occupations and professional predicaments of working people. That being the predisposition, he proceeded to interrupt and remind the chief dealer, who was on the telephone dealing, “ We have a prior appointment.”

Mr Patel’s meeting was for one purpose. “I need to know about treasury bills!” The chief dealer was stunned. An IMF representative wants to know about treasury bills ! But still the  the chief dealer took a few milliseconds to react and pointed to me. “You can speak to him on treasury bills and he will give you the back ground and the lotus yield calculations. Let me conclude this transaction.”For the uninitiated, Lotus 123 was the DoS equivalent of Microsoft Excel in the 90s. Mr Patel introduced himself as the resident representative of the IMF. I, as a journalist from Business Standard.

My credentials as a journalist did not go too well. He fumed, “ I did not come here to speak to the press.” The temptation to retort was strong, but then I gestured to the Chief Dealer, my departure and signaled I would meet him later. I left the Chief Dealer to the mercies of the IMF and the World bank.

That meeting with Mr Patel left an indelible impression. His appointment as Deputy Governor into the RBI confirmed my fears. His appointment as governor reinforced those apprehensions. The direction of the RBI is clear. It will most likely be steered, not by the RBI policy makers but by leadership from behind. That means financial interests take over. It could be foreign — perhaps Goldman Sachs or the Rothschilds ? It may even be domestic after all wasn’t Mr Patel was also once closely associated with Reliance group ? Public interest priorities be damned. This is happening even as the rest of the world is making strenuous efforts to exit clear financialisation of national economies. So what is next on the agenda ?

IMF and Goldman Sachs trained, Rajan and the present governor of the RBI ensured that banks have more bad loans on their books. He converted depositors into villians, fleecing the banks.Borrowers, big borrowers, were the new heroes. Never mind Vijay Mallya whose larceny has left banks with a gaping hole Rs 9000 crore or $ 1.5 billion dollars, all money that belongs to small savers. Mr Patel, his successor as Governor, comes from the same can.
Sycophants in MSM presstitute houses are already baying shrilly, “Reforms, Reforms and more Reforms without barely understanding or appreciating the repercussions. So, could bail-ins make their way in to the country? We need to wait and see.