Quest for Restoring Financial Stability in India

by Viral V. Acharya

Beyond the headline-grabbing issues, the Indian economy is struggling to solve a critical problem: How to restore and maintain financial stability on a durable basis. In this book titled, Quest for Restoring Financial Stability in India, Former Deputy Governor of RBI, Dr. Viral V. Acharya, talks about his quest for restoring financial stability in India and offers a concrete plan for sustained improvement. Dr Acharya shares a feasible plan to address the recapitalization needs of public sector banks, offering solutions on how to improve credit allocation by credit intermediaries and establish viable and efficient capital markets. Elucidating the need-of-the-hour reforms, this book also raises several stark and unanswered questions related to the re-emergence of fiscal dominance in India, not just of monetary policy tools but also of banking regulations. It makes a persuasive case for striking the right balance between the government, centralbank, private sector and markets, in order to improve long-run growth prospects for the real economy.

Genres: Economics, India, Finance, Nonfiction, Business

396 pages, Paperback

Published July 24, 2020

Reviews

[Adwaitvedant Mathkar · Rating 4 out of 5]

Collection of speeches given during his term as Deputy Governor. Covers five major themes- NPAs, Public credit registry, Monetary policy, Improving capital markets, and Autonomy of central banks. The lectures on public credit registry is good introduction on leveraging technology to improve financial inclusion. While the lectures are lucid, and often explained from first principles, you will need an above average understanding of economics & finance to appreciate them.

[HIMANSHU PODDAR · Rating 5 out of 5]

A collection of V. Acharya's speeches during his RBI tenure. Detailed in areas where he tries to make sense of the issues plaguing the economy of India. Acharya has a great understanding of how any Central Bank's decisions impact the economy and why its independence is of the utmost importance for long term financial stability of a country. Must read for anyone interested in understanding the effects of monetary policy, government intervention, deficit financing and crowding out beyond other topics.

[Sagar Acharya · Rating 4 out of 5]

ભલે મારું જીવન હતૂં એક માત્ર નાની દીવાસળી,
પ્રગટાવ્યા સર્વ કોડિયાં ને નામ દીધૂં દીપાવલી
-શૈલેષ શાહ

સૂ વાત છે ભાઇ, સૂ વાત છે. ગજબ કઇ ગ્યા

It's a fantastic book overall with difficult language. A fantastic pattern which Viral shows is that of fiscal dominance of governments.

The analysis of banks setting up benchmarks internally vs externally was interesting where I think that like China, setting of external benchmark 100% serves best. All banks obviously would say things best for them and not for bank depositor.

I write my viewpoint on this in detail at

https://designman.org/sagar/static/di...

I have generally found that laws around money are subjective and extremely difficult to enforce. Economics breaks at fear of death or very high penalties like 10 year jail sentences. A major chunk of a person's net worth would be readily charged around such events which could be Rs. 50k to Rs.50cr which are sufficiently different amounts. There is no substitute for bravery.

Highly recommend this read! Lots of amazing analysis and nice quips.

[Sridhar · Rating 3 out of 5]

A collection of some of his prominent lectures - the author underscores the tensions of what’s ailing with India’s macro financial system (and improvement actions there on) and the quarterly stress of holding an RBI job.
While the book gets into lot of details of definitions of banking , one aspect which went surprisingly missing is the relation between The Government and Central Bank. Specially, pertinent in these right-wing times. Viral Acharya chose silence on this.

Perhaps, that was intentional. Perhaps it’s a subject for Book 2.

[Sethu Krishnan m · Rating 4 out of 5]

Conscience, precise and in-depth analysis of India's financial stability; and how the fiscal dominance is acting as a threat to that stability. A must read for anyone who wants to know more about current challenges of Indian financial system in general and RBI's role in particular. Viral Acharya is ever so erudite and on the point in explaining various inter-linkages playing out in the Indian financial system.

[Tushar · Rating 5 out of 5]

Very good insights to get to know more about the working

[Nikhil Meshram · Rating 5 out of 5]

This book explores Viral Acharya (Deputy Governor) Speeches and his concerns for what he stood for during his tenure at RBI and his subsequent fallout with government resulting into his dramatic exit from RBI . He further talks about various areas like systemic risks faced by our financial system , Bad Loan Problem , creation of Public Credit registry , Resolution of NPA crisis, inadequacy of monetary transmission by banks and what RBI does to maintain the overall financial stability in the economy. The author has also written about the controversial issue of RBI's operational independence from the executive branch of the government , by elaborating his views on why it is necessary for long term macroeconomic stability, particularly when current political dispensation fail to see things beyond election cycle . In my view, some chapters have broadened my understanding, particularly the last chap which elaborates on crowding out effects of government borrowing on private sector borrowing, which slows down credit growth in the economy. This analysis is evidenced with empirical research which further strengthens the argument . Overall, the book is one of my top reads to be recommended in the banking and finance domain.