Kozhikode, 9th July, 2012: “Balancing the inflation, the price stability and the financial security of the country is one of the key challenges the Reserve Bank faces” said Dr. Duvvuri Subbarao, Governor of Reserve Bank of India, while delivering the leadership series lecture at the Indian Institute of Management Kozhikode on 6th July 2012.
Dr. Subbarao was addressing the students of IIM Kozhikode and he spoke about the significant and the leadership roles that the Reserve Bank, since its inception in 1935, have been playing during the years with its monetary functions and policies and in particular, its constant endeavour to be relevant to the everyday life of every Indian.
Speaking at the inauguration of the PGP batch at the IIM Kozhikode he said, “Without sacrificing growth, we will not be able to contain inflation. However, the sacrifice is only for a short period. The economy should be stabilized or else there will not be investments. Low inflation is also important for the mid-term growth and the monetary policy of the RBI is the first line of attempts to save the economy”. Dr. Rao added that, it was because of our farsightedness and proactive economic measures that India has been able to recover from the global recession quite fast, but overcoming the inflation and maintaining steady growth at the same time are real challenges for a vast country like India.
Prof. Debashis Chatterjee, Director, IIM Kozhikode presided the function.
The Governor emphasized that the concept of the apex bank is not only to regulate the economy and financial stability of the country but also to reach out to the under privileged. This is a quintessential function of the central bank with objectives such as ensuring price stability, growth and financial security in the market. A post economic reform that the Government has brought through RBI has helped the country boom and has fuelled the India’s aspiration to become a super power. India has moved from being a repressed country to an ever growing state.
The Governor pointed out that the poor sections of the society should derive benefits from the banking sector such as hassle free financial transactions as well as access to credits. The Governor informed that as of today only one out of six of the habitats in India have access to full-fledged banking services, which is quite inadequate and need to be addressed proactively. The RBI will
have to consider hundreds of millions of poor people who are directly affected by inflation, along with corporates while setting interest rates, said Dr. Subbarao. Business people are vociferous about interest rate hike. However we have to consider the poor sections of society who are affected by inflation than wealthy people, he explained.
Another criticism against the Bank is that the RBI cannot control inflation as it is caused by external factors. Dr. Rao said that the inflation over the last two years had been ‘imported inflation’ related to the price of oil. Dr. Rao added that the Bank is sympathetic to the genuine voice of the corporate, but inflation hurts the poor much more. Their voice is not represented in the media. They need to be heard as much as the corporates. “Whatever the reason for inflation, we have to stabilize the economy. We are trying to draw a parallel between the growth rate and inflation. The monetary policy of the RBI is the first line of defence to save the economy.” he said.
The apex bank is also considering the introduction of polymer notes on a pilot basis in the country. “These notes have been introduced in Singapore and Australia. Its longevity is one of its main advantages. An environmental study on the impact of the notes has already been conducted. Also, since it would be in circulation for a longer period, its impact to environment would be negligible.”he added.
Dr. Subbarao inaugurated the RBI Gallery in the Indian Business Museum at the Indian Institute of Management Kozhikode.RBI Gallery is one of the significant sections in the Business Museum. The Gallery speaks of the evolution of the reserve bank as well as the origins and history of the financial system in India.
Speaking on the Indian Business Museum, Dr. Subbarao applauded the Institute saying, “IIMK is a trailblazer in its endeavour to globalize Indian thought leadership with its efforts to guide and teach aspiring banking, financial professionals the origins of a strongly founded financial system”.
Prof. Debashis Chatterjee, Director, IIMK, added “the RBI Gallery is indeed a welcome addition to the wealth of information in the Museum and expressed hope that it will inspire the visitors with more insights on this important sector“.
About Indian Institute of Management, Kozhikode
Started in 1997 with its Postgraduate Programme (PGP), the Indian Institute of Management Kozhikode (IIMK) is on a high growth trajectory today, offering widest range of academic programmes in the field of management education. PGP student's intake for 2009 was 309 students i.e. 5 times in 7 years thus making it the fastest growing management school in the country to reach that landmark. This was done keeping the quality of the programme high, as the Institute continued to maintain its sound placement record, ranking among the top 5 institutes in the country.
IIMK pioneered Interactive Distance Learning (IDL) for working executives in India. The Institute is today a leader in Faculty Development Programmes (FDP) and is the major QIP (Quality Improvement Programme) Centre of the All Indian Council of Technical Education, in the field of management education. A significant step was taken for incubation of a Centre of Excellence jointly with Government of Kerala, which is one of its kinds in India, to help the Scheduled Castes/tribes students overcome their deficiencies in communication, personality, etc. Spread over about 100 acres of land, the Institute is situated on two hillocks in Kunnamangalam area of ancient city of Calicut in Kerala, is one of the most picturesque oxy-rich campuses in the country. A strong fleet of highly experienced and dedicated faculty coupled with the state-of-art knowledge resources and cutting edge computing & communication infrastructure enables IIMK offer a life time experience to the student as well as the research community. The Institute is all set to inaugurate the Indian Business History Museum, the first of its kind in the country, which aims at promoting entrepreneurship among the youngsters as well as acknowledging the profound contributions of the business houses and other visionaries. IIMK, today, is synonymous with a thought leader globalizing Indian thought systems and driving its application to the current corporate scenario.