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From Lehman to Demonetization

Written by Tamal Bandyopadhyay

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379 pages, about 8 hours of reading

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About this book

How did Indian banking protect itself from the Lehman Crash? What nearly wiped out the MFI sector in India? Why are public-sector banks suffering from so many non-performing assets? What is the conflict between the RBI and the finance ministry? From Lehman to Demonetization is the epic story of banking in India in the last decade. The years from 2007-17 were the most tumultuous and exciting years of this sector. It saw D. Subbarao, Raghuram Rajan and Urijit Patel as RBI governors working with finance ministers Pranab Mukherjee, P. Chidambaram and Arun Jaitley. What a decade it has been-from India's first MFI, SKS Microfinance, getting listed to the near death of the industry; the RBI giving the nod for twenty-three banks and becoming an inflation targeter; from 9 per cent economic growth for three years to the jolt of demonetization. These essays make for a riveting read. The book also features interviews with the who's who of this sector, including Deepak Parkeh, K.V. Kamath, Arundhati Bhattacharya, Chanda Kochchar, Aditya Puri, Shikha Sharma, Raghuram Rajan, U.K. Sinha and Viral Acharya. If you had to read one book on banking in India, this would be it!

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Reading guide

Themes, characters and key ideas in From Lehman to Demonetization, written by Chaptra AI.

  • about 12 hours
  • advanced
  • Informative
  • Analytical
  • Insightful

Tamal Bandyopadhyay's "From Lehman to Demonetization" offers an intricate decade-long chronicle of Indian banking, spanning from 2007 to 2017. The book meticulously dissects how India's financial sector navigated the 2008 global financial crisis, the near collapse of the microfinance industry, and the burgeoning crisis of non-performing assets in public-sector banks. It also delves into the often-tense relationship between the Reserve Bank of India and the Finance Ministry, culminating in the seismic event of demonetization. Through a blend of insightful essays and candid interviews with key figures, Bandyopadhyay paints a comprehensive picture of a period marked by both unprecedented growth and profound challenges, making it an essential read for understanding modern Indian finance.

"India's unique regulatory conservatism, often seen as an impediment, proved to be an unexpected bulwark against the global financial tsunami of 2008."

Key themes

Resilience and Vulnerability of Indian Banking
This theme explores how the Indian banking sector, despite its unique characteristics and regulatory framework, managed to withstand the global Lehman crisis but then faced severe domestic challenges like the MFI crisis and the burgeoning NPA problem. It highlights both the inherent strengths (e.g., conservative lending, strong regulation) and systemic weaknesses (e.g., politically influenced lending, governance issues in PSBs).
The RBI-Finance Ministry Dynamic
This theme delves into the often-contentious relationship between India's central bank (RBI) and the government's Finance Ministry. It examines the tension between central bank autonomy in monetary policy and financial regulation versus the government's fiscal policy objectives and broader economic agenda. The book illustrates how this dynamic impacted major decisions and reforms.
Impact of Economic Policy and Reform
This theme analyzes the profound effects of various economic policies and reforms implemented during the decade, ranging from regulatory changes to large-scale initiatives like demonetization. It explores their intended and unintended consequences on the banking sector, businesses, and the broader economy, including aspects of financial inclusion and economic growth.

Worth discussing

How effectively did India's financial regulatory framework protect it from the 2008 global financial crisis, and what lessons can be drawn from this experience?

Chapter-by-chapter breakdowns, character arcs and the full thematic analysis come with a free account.

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