Rajan to Staff: Read, Get Tough, Send Press Releases Earlierby
India central bank governor speaks his mind in memo to staff
Calls for debate on 'protectionist attitudes' in the bank
Read more magazines, don’t be afraid of your boss, use less jargon and send press releases before 5:30 p.m.
That’s some of the advice Indian central bank Governor Raghuram Rajan shared with the regulator’s 17,000 employees in a memo that gives a glimpse into his efforts to change the culture at the 80-year-old institution. The 2,500-word New Year e-mail, obtained by Bloomberg, came about eight months before his three-year term is set to expire.
The wide-ranging comments from Rajan, once the International Monetary Fund’s chief economist and a professor at the University of Chicago, show steps he’s taking to modernize the central bank apart from overhauling monetary policy. He appeared to draw upon past speeches where he’s railed against oligarchs and corrupt politicians, urging staff to get tougher on companies that don’t comply with regulations.
"If we are to have strong sustainable growth, this culture of impunity should stop," Rajan wrote in the memo, which was first reported on by the Economic Times newspaper. "We cannot be seen as a paper tiger."
Rajan and Prime Minister Narendra Modi have adopted a tough-love approach to state banks, insisting on more management discipline in return for capital injections. In its quest to clean up bad loans, the government has pledged to tighten bankruptcy laws that it says favor debtors.
Most of the memo focused on procedures within the central bank, and suggested more change is coming to things like employee evaluations that heap praise on most people.
“If we demand more of the regulated, we should not be found wanting ourselves,” Rajan wrote. “Unfortunately, our performance evaluation system did not help us identify who needed motivation and improvement, and how they could be helped to do so. Almost everyone was deemed excellent, ranging from those who gave their heart and soul for the Bank to those who shirked all responsibility or duty.”
Alpana Killawala, the central bank’s spokeswoman, didn’t immediately respond to an e-mailed query on Tuesday night.
"Rajan thinks out of the box," said Arvind Mayaram, a former Finance Ministry official who has worked closely with Rajan, referring to the memo. “It only shows his impatience with the manner in which things have happened."
Rajan called on his colleagues to break down silos in the workplace and meet lower-level staff more regularly to explain decisions. Customers should be given clear answers, he said, urging employees to avoid "hiding behind opaque rules."
"It means fast responses to the queries that come to your desk, recognizing that cooperation will be amply repaid," he wrote.
He coaxed staff to be more curious about the world and pledged to improve career planning support. The institution must develop the skills to monitor new trends, he said.
"If we do not expand our responsibilities, others will fill them," Rajan said.
Rajan didn’t shy away from controversial topics. He made the case that the central bank should be willing to hire outside experts if the required skills aren’t available in-house, a touchy topic among rank-and-file staff who went on strike in November for the first time since 2009 to protest institutional reform and demand better pensions.
"This is one area where I feel protectionist attitudes in the organization are strong and require to be debated," Rajan said.
Rajan wrote about the need to improve communication with the wider world, referring to an instance when the central bank was branded as "anti-technology" for seeking to close a loophole that allowed ride-hailing application Uber to permit simpler payments. Press releases should get to the point quickly and reach journalists before 5:30 p.m. to get into the newspapers the next day, Rajan said.
“Some in the Bank disdain communication. ‘Why not let our achievements speak for themselves?’, they might say,” Rajan wrote. “Unfortunately, in this world where the press is more attentive and the public more hungry for news, we either should shape news or we will be shaped by it.”