Boostrapping : CURR.01 - RLPP over RBI/SBI
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Proposed administrative procedure - CURR.01
RLPP/Jury   over   RBI/SBI   staff

Purpose : To reduce nexusproness in Reserve Bank of India

Pre-requisite reading :
  • RLPP
  • Expulsion By Jury

    1. Problems RBI and banks cause
    2. Solution? CURR.01 : RLPP/Jury over RBI/SBI
    3. Advatages of CURR.01
    4. Draft to create procedure CURR.01

    The problem RBI and other banks cause

    Modern non-gold banking, like journalism, was born in sin.

    The worst problem RBI/banks create is that the banks create money from thin air, and charge interest on it. Say banks create Rs 100 cr out of thin air. Then they will be give to borrowers, be Government or public, only on the condition that borrowers repay Rs 100 cr plus interest. Say interest rate is 8%. Then borrowers will have to repay Rs 108 cr at the end of the year. Pray, how can borrowers repay Rs 108 cr if ONLY Rs 100 cr worth cash was created to begin with? IOW, the borrowers' debt will keep increases. And if and when they go bankrupt, the bankers will grab away their wealth.

    This phenonmenon benefits those who own banks, or those who are senior executives in banks, or thoese who have nexuses/friendship with the bank-owners/executives. And this is burden on everyone else.

    The problem would have remained under control if our banks' senior staff members did NOT have nexuses with wealthy individuals, who are the regular borrowers as well as habitual defaulters. As of today, RBI and nationalized banks are second most nexused bodies in India, next only to our courts. These nexuses resulted in huge Non Performing Assets (NPA), in which a borrower would just take huge loans and never repay.

    The problem with RBI/banks is similar to what we see in Indian courts. In Indian courts, the judges have a long term, and form nexuses with lawyers, criminals, Ministers, officers etc. These lawyers, Ministers etc would take favors from judges and in return, they will provide cash/promotions etc to the judges. The RBI/banks' staff acted in similar way. Some big borrowers would give bribes to RBI/banks' senior staff and get as much loans from banks as they want. The banks' senior staff would give the loans and the RBI-staff, which is supervisor, would just ignore dozens of irregularities involved. The staff knew from the begining that money would NEVER come back, and it did not

    The NPA was eventually repaid by commons in following way --- the banks reduced interest rates on deposits, but many Govt bodies kept paying higher than market interest rates on the loans they had taken. And when did these Govt bodies get money to pay? By royalty over natural resources or taxation. In first case, the money that was supposed to get distributed to us commons went into banks to repay NPAs. And in second case, again, the taxation reduced the incomes of the commons.

    Solution? CURR.01 : RLPP/Jury over RBI and SBI

    Now good news is that we the citizens DO NOT need to solve the nexus problem in ALL the banks. Most banks can be just privatized, and left to the mercy of the free market, and let sharefolders solve the nexus problem. But two banks cannot be privatized --- RBI and SBI. Becuase RBI issues legal tender of India, and at least one Govt-owned bank is needed so that various departments of govt need to transfer funds amongst themselves and with govt employees and public.

    Following are the administrative procedures I propose to reduce nexus problem in RBI/SBI :-
    1. The PM will appoint the Finance Minister (as today).

    2. The Finance Minister will appoint RBI-Governor, 5 RBI-Directors, SBI-Chariman and 5 SBI-Directors (as today)

    3. The Finance Minister will appoint one Registrar per district or he may assign duties to an existing Registrar.
    4. Any citizen of India who wishes to be RBI-Governor, RBI-Director, SBI-Chariman or SBI-Director can register himself at Registrar's office as candidate after paying registration fee.

    5. Any citizen of India with an ID chosen by Registrar can go to his office, and approve upto
      1. 5 candidates for the position of RBI-Governor
      2. 5 candidates for the position of SBI-Chairman
      3. 10 candidates for the position of RBI-Directors
      4. 10 candidates for the position of SBI-Directors
    6. The citizen can withdraw his approval anyday.
    7. If the candidate for RBI-Governor meets following 3 conditions
      1. his approval-count is highest of all candidates
      2. his approval-count is over 25% of ALL citizens in India
      3. and his approval count is 2% more than approval-count of existing RBI-Governor
      then the Finance Minister will expel the existing RBI-Governor and make that candidate as RBI-Governor.

    8. Same will be the rule for replacing SBI-Chairman

    9. The rules for replacing Directors are similar. If a candidate (who is not already a Director) for Director meets following conditions
      1. his approval-count is highest
      2. his approval-count is over 25% of ALL citizens in India
      3. and his approval count is 2% more than approval-count of RBI-Director with lowest approval count
      then the Finance Minister will expel the existing RBI-Director with lowest approval count, and make that candidate as RBI-Director. If two RBI-Directors have same approval-count, then FM will chose one at random and expel him.

      [Please see
      web-page on RLPP for details.]

    10. The FM will appoint a JA (Jury Administrator) for each district, or use an existing Jury Administrator. The JA will form a Grand Jury using 30 randomly selected citizens of the District. Each citizen's term will be of 3 months.

    11. If a citizen has evidences of wrong doing of any staff member of RBI/SBI in a perticular District, he may present the evidences before Grand Jury. If over 15 Grand Jurors agree that there is a prima facie evidences, then JA will summon a Jury of 12 citizens.

    12. The 12 Jurors will hear the arguments from both sides. If over 8 Jurors declare that the RBI/SBI employee is unfir to serve the citizens, the FM will transfer that employee. After two such transfers, he will be expelled.

      [please see web-page on "Expulsion by Jury" for details.]

    13. The staff will be recruited strictly by written exam, and will be transferred at random only.

    Advatages of CURR.01

    The above procedures will ensure that
    1. There are much less nexuses amongst RBI/SBI officers than today
    2. There are much less nexuses between RBI/SBI officers and borrowers than today
    3. Such nexuses do much less damage than today. eg these procedures would reduce the NPA, which was mainly a result of nexuses between RBI and

    Draft of the act to create procedure CURR.01

    To enact CURR.01, the citizens would need to pass "RLPP/Jury over RBI/SBI" Act in the Parliament. The draft of the Act is given here.

         It will be wiser for citizens to first enact procedure LM.03, and then use LM.03 to pass this act. To know about procedure LM.03, please click here.

    If you have any other question, please mail it to Thousand thanks in advance.

    Next - CURR.02 : Restrictions on issue of RBI-notes