09/08/2016 World Business Report

Raghuram Rajan makes his swan song as head of the Indian Reserve Bank.

He's been dubbed the "rockstar" central banker for curbing India's

run-away inflation, but who will replace him?

And is high-street banking on its last legs?

We'll take a look at the technologies set

to revolutionise the way we move our money.

Also in the programme, we'll cross live to Asia to hear

about China's latest set of inflation figures.

We start in India where today Raghuram Rajan will make his last

policy decision as governor of the Indian central bank.

It's not often that policymakers are described as rock stars,

and Mr Rajan will be a very difficult act to follow.

When he took over as head of the central bank in 2013,

India was suffering from rampant double-digit inflation

and a currency that experienced sharp falls on a daily basis.

Mr Rajan brought India in line with modern economies by adopting

Since then prices are much more stable.

The latest data shows the Indian inflation rate

When Mr Rajan steps down in early September, his successor will be one

of the key policymakers responsible for the fastest growing major

Sameer Hashmi joins us from outside the Indian central bank.

Nice to see you. It is quite an important day. Let's start with any

decision they are likely to make it the central bank today. -- at. In

less than an hour's time we will find out what Rajan's last decision

is as far as monetary policy is concerned. Given what has happened

in the last couple of months, Rajan has been vocal that inflation is a

big worry for India, and he will not cut rates until the reserve bank of

India, the central bank, is sure it is in the comfort zone, as they

describe it. No surprises expected given it is Mr Rajan's last policy

and during his tenure his focus has been keeping inflation low. It looks

unlikely there will be rate cuts. So just explain, are we any clearer as

to why he is going? There was controversy about the fact that he

decided not to continue, and who might fill his shoes? Well, Mr

Rajan, his three-year term comes to an end in September and the rule

allows the Indian central bank governor to get a two-year

extension. The Indian government, headed by Narendra Modi, there were

voices in the government which were not in favour of Mr Rajan

continuing. Now, there are various reasons for that, some are

political, some feel that he was not doing a good enough job, some

thought he kept interest rates too high. One of the key reasons or

perceptions here is Mr Rajan is a very candid intellectual who does

not shy away from speaking his mind. He has criticised many policies

initiated by Narendra Modi's government and many think that is

what went against him because the government does not want a central

bank governor who speaks his mind, criticise decisions and even issues

that doesn't fall in the domain of the Indian central bank. That is one

key reason why the government is not keen to give him an extension and

that is why Mr Rajan decided to quit. As far as York question, that

is the million dollar question -- your question. The government is

expected to announce it in the next couple of days. Some of the leading

contenders include the former chief economist of the International

Monetary Fund, there is also the chief economic adviser to India. The

thinking is the government wants to replace Mr Rajan with the person who

has global credentials so that it sends out the right message to the

investors and the business community at large. Super. We will watch with

interest. For now, thank you. It's not just central banking

making the headlines. Today we receive the findings

of a two-year investigation into competition in the UK

commercial and consumer banking The country's watchdog is expected

to highlight the role of technology in providing alternatives

to traditional high street banks. Mondo Bank is a smartphone based

current account provider. The company is set to receive

its banking license later this year. With me is Paul Rippon,

the company's deputy Chief Good morning, Paul. I would imagine

this report coming out today is music to your ears, the fact they

are likely to say that the main players on the high-street have to

do more to increase their technology. Yes, the report out

later today I am sure will give the big banks are big kick and I think

that is very appropriate indeed. Yes, you are right. It is all about

messages of transparency and also it is about these things, you know,

smart phones. Three out of four of us are using them every day and it

is about time banking took advantage of the fantastic power in these

things. You have worked in banking for many years, worked for quite a

couple of high street players and building societies. It is funny,

because the smart device in Africa or India is the way to do banking,

when many don't have access to a high-street bank. It is in all

developed economies like the UK where we are far behind. You think

so but already there is change. At Mondo Bank we're already seeing

people with their fingers. Instead of with their feet. We have got

about 200,000 people already that have said they want to hear and to

know more about it. It is very exciting. I think change is

happening already. Change is happening for few but not for the

vast majority of people who use banks in the UK, and this report is

basically going to criticise the main players in the industry to say

they are not doing enough, not transparent enough, not telling us

enough about when we are being charged and what we are being

charged. Do you think high-street players will listen? I do believe

they will listen. How long they will take to do anything about it is

another thing entirely. About half of people, for example, use

overdrafts, and I believe that is where this report will particularly

focus on. Half people use an overdraft, I use mine, they can be

quite expensive, and this is about time that phones are used and banks

can make it much clearer. I think that is very good news but you are

right that it will take a long time. It might take a long time and for

those of us who are technophobes, using a phone to do my banking is

scary, I won't put all my money and decisions on a smart device. Well,

you know what, that is what these... They are incredibly powerful, and

that is the job, so companies like Mondo, we are trying to make the

experience magical, so you shouldn't need to do the hard work. That is

one of the problems with banking at the moment. You have to do all the

hard work. So let's make it feel like magic. And why shouldn't it be?

Banking is magic, that is the first time I have heard that on this

programme. Thanks very much for coming on. Let's move on.

In the last few hours, we've received the latest inflation

Lovely to see you. What's it like, good, bad or other? Nothing, it

wasn't really that exciting. It goes to show that the cost of living in

China rose by 1.8% in July from year ago levels because of rising

vegetable prices in some areas. They were focusing on the producer price

index, measuring cost of goods at factory gate, which fell 17% year on

year last month and Chinese PDI has been negative for more than four

years. Narrowing declines over the last couple of months have fuelled

hopes the economy could be reaching the bottom of a painful slowdown and

analysts has said the improvement in the PPI should benefit the corporate

sector's profitability but it will also mainly help state-owned

enterprises which dominate heavy industry. Well, this twin

development coming out today, Sally, comes out of trade figures on

Monday, which revealed exporter fallen nearly 4.5%, suggesting world

demand is weakening, while the 12.5% tumble in imports is a reminder that

China's economy is indeed slowing down. And this highlights that the

strategy to improve the -- domestic consumption has failed to offset the

marked slowdown in the mainland's traditional economic driver, so

going forward still the major challenge of growth for the Chinese

economy. All right, thank you so much. Let's quickly look at markets,

so you have a sense of how it is going. Four days of gains for Japan.

That is not right across the board. Oil is just down below $45 a barrel.

I will see you very soon. We will talk you through the papers very

soon. Say -- stay with us. Sally will be joining the very

shortly to have a look at the papers around the world but first I want to

bring you some news that has come from the housing charity,