Mumbai: A quality that Reserve Bank of India governor Sanjay Malhotra says has helped him support innovation and invite new ideas and diverse perspectives is challenging the status quo.
“I learnt to question the status quo. I learnt that there is always scope for improvement. This helped me improve efficiency in various organisations and departments that I worked in,” Malhotra said in his convocation address at his alma mater, the Indian Institute of Technology, Kanpur. “It helped in reducing the processing time of files. I reduced turnaround times for applications. It helped me make changes in laws, rules and procedures for the benefit of citizens and government alike, as I questioned the status quo.”
Policy reversal for growth
Since January this year, Malhotra has partially reversed some of the tight regulations introduced during his predecessor’s regime as India’s GDP growth slowed to a four-year low of 6.5%.
RBI reduced risk weights on personal loans and loans to non-banks by 25 percentage points to 100%. In 2023, the central bank had increased risk weights or the capital that banks and non-banks had to set aside for every loan to 125% amid concerns of rising stress in personal loans.
Similarly, RBI under Malhotra also eased the capital that banks need to set aside for new project loans and liquidity they hold for digital deposits. Malhotra also pushed growth by announcing a 50-basis-point cut in the repo rate and a 100-bps cut in the cash reserve ratio (CRR).
The repo rate is the rate at which banks borrow from RBI, and CRR is the percentage of deposits that banks are required to keep with RBI as reserves.
In his speech, Malhotra also emphasised the importance of trust and why leaders should have the courage to take bold decisions to earn trust.
“To earn trust, a leader must have the courage to take difficult decisions. He must act in the interest of the employees and other stakeholders. He must be willing to accept responsibility,” he said.
He recalled an incident when, serving as secretary, department of personnel in the Government of Rajasthan during 2007-08, he tried to resolve a 20-year-old issue of promotions from state civil services to the IAS being delayed due to disputes and court cases.
“When I was given responsibility for this department, I took up the gauntlet. I studied all the disputes and judicial pronouncements meticulously; decided on claims of seniority and promotion, without fear or favour; finalized and published the seniority lists; and after spending months on this mammoth exercise, sent the proposals to UPSC for promotion,” he said.
Underscoring that the technology is advancing at a lightning speed, he said, “The degree has only laid a solid foundation and will take you thus far. You will need to build from here. You will need to learn when you change sectors, move across organisations within a sector, take up different roles within an organization and even within the same role in an organization.”
