Year-end Quiz 2022 – Answers

Short answers to the quiz on RBI and central banking

For the long answers to each question, see here. For the short answers, please read on.

Governors

1.     As is well known, Sir Osborne Arkell Smith, an Australian national, was the first Governor of the Reserve Bank of India. Smith had a unique academic background among all Reserve Bank of India Governors. What was it?

Sir Osborne Smith was the only Reserve Bank of India governor who never attended college.

2. Sir Osborne Smith and Sir James Taylor, the first two Governors of the Reserve Bank of India, were born outside India. Who were the other two born outside India?

Manmohan Singh in Gah, Pakistan. Urjit Patel in Nairobi, Kenya.

3.     Dr C Rangarajan wrote in his memoir, Forks in the Road, released recently, that he was only the second Governor of the Reserve Bank of India to become the Governor of an Indian State, the state of Andhra Pradesh. Who was the first, and of which state?

LK Jha was Governor of Jammu and Kashmir from 1973 to 1981.

4.     When Dr Raghuram Rajan became a member of the Group of Thirty, the global think tank, he was only the second Governor of the Reserve Bank of India to do so. Who was the first?

IG Patel.

5.     LK Jha, the civil servant and former Governor, was a member of which Commission, better known after the person who chaired it, which looked into North-South issues?

The Brandt Commission.

6.     Who was the first Governor of the Reserve Bank of India to receive one of the three Padma awards, the highest national honours after the Bharat Ratna?

HVR Iengar was the first governor of the Reserve Bank of India, serving or retired, to receive a Padma award. He received the Padma Vibhushan in 1962.

One bank

7.     The autobiography of one Governor and a biography of another discuss this bank. A third Governor makes a passing reference without naming the bank or discussing the issue in detail. The official history of the Reserve Bank of India skipped the episode. So did the then Finance Minister in his memoirs. Which bank are we discussing here? Who were the Finance Minister and the Governors? What was the issue? What was the global fallout for banking supervision from the case?

Which bank are we discussing here? The Bank for Credit and Commerce International.

Who were the Finance Minister and the Governors? Dr IG Patel’s autobiography and Dr Manmohan Singh’s biography by his daughter, Daman Singh, Strictly Personal: Manmohan and Gursharan, discuss the bank at some length. Dr C Rangarajan makes a passing reference without naming the bank. Pranab Mukherjee, the Finance Minister when the Reserve Bank gave a licence to the bank, did not mention BCCI in his multiple-volume memoir.

What was the issue? Dr IG Patel, Governor from 1977 to 1982, refused to give the bank a licence because of adverse reports against the bank. A licence was after that issued during the tenure of his successor, Manmohan Singh. The bank’s liquidation in 1991, when Manmohan Singh was the Finance Minister, created a furore in the Parliament.

What was the global fallout for banking supervision from the case? The Basel Committee on Banking Supervision announced in 1992 the minimum standards for supervising international banking groups and their cross-border banking establishments.

Central Board

8.     Who was the longest-serving director on the Central Board of the Reserve Bank of India? He is probably better remembered today for his/his family’s contributions to which entirely different fields and why?

Lala Shri Ram was director for 26 years, from the Bank’s inception in 1935 till 1961. Apart from the DCM Shriram Group, Shri Ram is best remembered for the Shri Ram College of Commerce and Lady Shri Ram College in New Delhi. The Shankarlal Music Festival, the premier music event organised annually by the Shriram Bharatiya Kala Kendra, is named after Sir Shankarlal, Shri Ram’s brother.

One bungalow

9.     The costliest real estate transaction in India, involving a bungalow, was the sale of Madhu Kunj, on Narayan Dabholkar Road in Malabar Hill, Mumbai, in April 2021 for Rs 1001 crore. So, what was the distant connection between the building and Indian banking and financial history?

The Premchand Roychand Trust partly owned the bungalow Radhakishan Damani purchased for Rs 1001 crore. Premchand Roychand was the original Harshad Mehta, whose share market dealings in the 1860s brought down the first Bank of Bombay.

Another bank

10. In 1921, the three Presidency Banks of Bengal, Bombay, and Madras merged to become the Imperial Bank of India. Its jurisdiction on the western side bordered present-day Afghanistan. On the east, it included Burma or present-day Myanmar. In other words, up to the border of Siam (believed to be derived from the Sanskrit word Shyam), now known as Thailand. The new bank was given a stiff target for its total number of branches. This was to be achieved within five years. What was the target? Did the bank achieve it?

The target was 100 branches. The low target for what was and still is the most significant bank indicates the low penetration of modern banking during the period. The bank achieved the target.

Note

For the long answers to each question, see here.

There were no winners in the Quiz.

Considering the low general interest, I may not follow up with another edition of the Quiz.