How transparent is the revolving door between government and India’s financial street?

It is always difficult to pick up blogging post Diwali break. But one has little choice but to warm up towards it.

One thing which has come to the fore post 2008-crisis is the strong connections between Government and financial streets across the world. We have seen quite an eminent people leaving govt and then immediately joining a bank and vice-versa. It is as if there is a revolving door between these two offices which makes shuffling from one building to the other an easy one.

Two recent news pieces made one wonder India’s stance on these crucial matters. First is South Indian Bank and second is Yes Bank. In both, there are two eminent who have joined as Non-executive chairpersons of the board. And both of these, not very long ago worked in Indian central bank and the government in senior roles.

Now I am not saying there is any wrong doing on this matter. One has respect for all such individuals as it is not really easy to rise professionally in public sector.

It is just that one wants to be sure of the rules. Is there a cooling period? If yes, what is its tenure? Ideally there should be a long cooling period which dissuades both the parties from getting into the contract.

Then is there a need to differentiate between taking such private sector roles in real sector vs. financial sector?  Are the two same or we need different sets of rules in the two sectors. May be (or may be not) one can allow an easier transition in real sector given the impact is not much. But in a finance job, it could be that direct/indirect relations between firm and government extend across a much larger space. So, may be one wants more rigorous implementation in financial sector.

It may not mean much now. But the Tata crisis tells you, don’t take anything for granted. These moments hit you suddenly and cause a lot of damage.

It is also interesting that usually we usually criticise public sector jobs as inefficient etc. But there usually is a beeline for such people as they retire from their respective jobs. It is such double standards….


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