TV Mohandas Pai has sought the finance ministry's intervention in the industry's relationship with the Reserve Bank of India (RBI), saying the central bank "doesn't listen" and does not respond to letters.
"If you write a letter to RBI asking for an approval, they don't reply. You have to hire a Big 4 (accounting firm) to go to Bombay, walk on the tables, and get your approval. It's a sad reality of India. Please accept that," Pai, chairman of Aarin Capital and Manipal Global Education, said at an interaction with the top brass of the finance ministry, including Finance Minister Nirmala Sitharaman, in Bengaluru on March 7.
Finance ministry officials are currently visiting various cities and holding post-budget interactions with stakeholders.
Pai's initial grouse was to do with tax and Employee Stock Ownership Plans (ESOP) of start-ups. According to Pai, 40 of India's 93 unicorns are based outside India because of RBI regulations and related compliance issues.
"It is a mess. RBI doesn't listen. We have gone to them many times. If you can take a meeting and listen to us with the RBI, we will be very grateful," Pai told the finance minister and her secretaries.
Ajay Seth, the Department of Economic Affairs secretary and an RBI board member, defended the central bank.
"It will be a loose comment to make that RBI does not listen. They will not agree with your viewpoint. We here, we have heard all your suggestions very carefully. We consider them. We find some of them not feasible and we don't act upon it. Others, we act upon it. If you feel there is an issue with the RBI that has any fiscal element, any policy issue for the government, we will be all ears," Seth said.
However, Pai doubled down on his complaint, saying matters had not improved despite him having personally spoken to RBI Governor Shaktikanta Das.
"I spoke to Dr Rajan (former RBI governor Raghuram Rajan), he came to Bangalore and tried to improve matters. It improved. I spoke to Shaktikanta Das in Bombay. I met him several times, spoke to him. But we don't see an improvement. It's not like interacting with you. They don't respond to letters," Pai said.
"Why can't you have a status where everybody has to respond to a query and give an approval within 45 days. Then the problem will be solved. We have to hire a Big 4. Pay them money. They go to Bombay. They go everywhere. Why should we do that?"
The RBI did not immediately comment on Pai's remarks.
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