Talking about the costs of demonetisation, former RBI governor Raghuram Rajan said, “Post-demonetisation, electronic transaction volumes reverted back to earlier pre-demonetisation trends. I didn’t see any permanent upliftment arising as a result of the exercise,” while launching his book “I do what I do”.
When asked about State Bank of India merger with associate banks and other possible mergers in future among the PSUs, Rajan said, “I would advocate mergers, when the two entities are in good financial health. When both banks are under stress, they need to focus more on cleaning up their balance sheets. A merger at this stage is not really conducive.”
On demonetisation, he said, “I had to clarify as there were committees which gave responses to Parliament and that did not accord with my recollection of the events and communications. I felt I owed it to Parliament to share my knowledge of the situation.”
On US-North Korea crisis, “In a world of strong men; or at least men who like to appear strong -I worry that room for adjustment is limited. I don’t think anyone is comfortable with the chief protagonists in this situation. But, the US democratic set-up is vast and I’d like to believe has sufficient checks and balances in place.”
The FCNR deposits scheme he introduced in 2013 “was a calculated risk, which paid off.”
On emerging currencies, Rajan said, “The concept of a distributed ledger is interesting. Many banks have started making use of such a system for financial transactions. It remains to be seen how they bring in wider adoption. As to bitcoins or the crypto-currency, there is no underlying asset justifying the valuations -it seems to be a frenzy of bidding up.”