Hong Kong: Arundhati Bhattacharya is the first woman to head State Bank of India (SBI), the country’s largest lender.
In 2016, she was listed as the 25th most powerful woman in the world by Forbes.
Bhattacharya was one of the key business leaders tasked with the implementation of the demonetisation exercise of Prime Minister Narendra Modi. Her role was significant as she heads a state-owned financial services company with assets worth $460 billion, and more than 14,000 branches spread across the country.
“The job to remonetize India has been an enormous task,” explains Bhattacharya. “Nowhere has an economy taken out 86% of its currency in circulation. And, specifically, not an economy of 1.3 billion people which is as cash-intense as India is. Coupled with the fact that we, in the banking system, did it without any notice and preparatory time. We were just pushed off the deep end and expected to swim. And, I can say with some pride, that we did it, and did it very well.”
Speaking at the Asia Society in Hong Kong this month on the opportunities and challenges in India, Bhattacharya noted that there had been a lot of concern that India’s third-quarter gross domestic product (GDP) numbers would take a beating because of demonetisation.
But this has not come to pass.
“Despite demonetisation, India’s GDP growth is 7%. India is on track,” she says, with some degree of satisfaction.
The five state election results in India this week has also doubly endorsed this view of the SBI chairman.
“Indian Prime Minister Narendra Modi turned the narrative around on demonetisation very quickly by promoting the move as one way of ending systemic corruption in the country. Where his critics assailed him and questioned the economic logic behind the move, he managed to convince the people that, for the first time, someone was targeting the corrupt and rich sections of the nation,” she explains.
Bhattacharya claims that India is on the right track today because it has a stable and trusted political leadership that has effectively put into action its vision for a corruption-free digital economy that a majority of the nation buys into.
“Had it not been for the groundswell of support by the people of India, we would not have seen such a huge exercise of demonetisation bounce off without a single riot or a single law and order issue.”
The 60-year old Bhattacharya was born in a well-educated Bengali family.
She was raised in Bhilai by Prodyut Kumar Mukherjee, who was working with the Bhilai Steel Plant as an engineer, and Kalyani Mukherjee, who was a homeopathic doctor.
With a degree in English literature, Bhattacharya was determined to pursue the path of journalism; but as it happens often, life took her on a detour.
In 1977, she decided to sit for the SBI probationary officers exam and nailed it. She entered the banking sector and has not looked back since. Bhattacharya has become a role model for women in India today.
She credits her husband, Indian Institute of Technology-Kharagpur professor and engineer Pritimoy Bhattacharya, and her extended family, which stepped in to help raise her daughter, Sukrita, who was born in 1995.
Bhattacharya says she was also guided along the way by her mentor and former chairman of SBI, M.S. Verma, who advised her “to never give up” even when the going gets rough.
She made this her mantra.
Today, Bhattacharya has become the first chairperson, in the 210-year long history of SBI, to get an extension after the retirement age of 60.
“I know Miss Indra Nooyi, the head of PepsiCo, has been credited with saying ‘you can’t have it all’. But, I think, that depends on what your definition of ‘all’ is. If you can define it in a way that is practical and pragmatic then it is possible to have it ‘all.’”
The SBI chairperson says many women regularly fall off the workforce ladder because they think they will not be able to properly take care of the responsibilities of the family and the workplace.
“Women being women, they are very sincere, committed and honest in what they do. If they feel they are short changing some segment of their responsibility, they have a tendency of holding themselves back. What I would like to tell them is that it is not necessarily true that you will short-change one or the other.”
She often gives this analogy that when one is driving in a tunnel on a dark night on a highway and can only see up to the point where the headlights go; beyond that, your vision sees sheer darkness.
“But, what lies ahead is a matter of your belief,” she explains. “Most of the time, women believe that what lies ahead is a precipice. Whereas, if you continue to drive, and stay on the path, the road will open up in front of you, and you will reach your destination. You don’t need to turn around and abandon the journey.”
Bhattacharya’s journey has been defined by hard work, optimism, and steely persistence. It has led her to be at the forefront of India’s economic successes in the past few decades. In her own modest way, she has also helped shape it.
Looking at the future, the SBI chairperson believes that one of the critical ways that India’s growth will leapfrog will be when “we get eight to ten really good chief ministers”.
In her view, this trend has already taken hold as most chief ministers today realize that if they don’t bring about development in their state, they are not going to last long.
“Earlier, the idea was to keep people poor, keep people illiterate, pay them just before the election, and you’ll get the votes,” she explains.
“Now they have realized that the people are taking the payment from every party, and then simply electing who they want. And who they want to elect are the candidates and party that delivers maximum growth and good governance.”
A lesson that was clearly on display this week in the results of the Indian state elections.
Edited excerpts from an interview:
Do you think India is set to become a digital economy in the near future or is this still a distant dream?
India is definitely set to leapfrog using digital in a manner that is not used anywhere in the world. Today, for instance, India has the largest biometric database in the world. So, out of 1.3 billion people, 1.1 billion people have what is called an Aadhaar number, a unique identification number, given on the basis of 10 fingerprints and retina scans.
So, there’s no way of mistaking one person for the other. The government has now asked this number to be linked to each person’s bank account. Very soon, we will have a system where Indian citizens will be able to operate their bank account using only the unique identification number.
They don’t need a card, or a signature, or anything else, just their unique identification number will suffice. This is unprecedented in India and elsewhere.
Second, the country has recently also created what is called a UPI, or Unified Payment Interface. It is a payment system that allows money transfer between any two bank accounts by using a smartphone. UPI allows a customer to pay directly from a bank account to different merchants, both online and offline, without the hassle of typing credit card details, IFSC (Indian Financial System Code), or net banking/wallet passwords. These huge digital innovations are a sure indicator that India is well on its way to becoming a 21st-century digital economy.
Has demonetisation worked to achieve the goal of a digital India?
Yes, I think one of the biggest benefits of this exercise has been the boost given to the digital economy. The fact that UPI has come in very quickly is indicative of this trend. Necessity is the mother of invention. Because there was a necessity to create such a payment system, it’s already a reality.
In what way has demonetisation helped with accounting for black money and reducing corruption in your view?
Because of demonetisation, there is much more focus today on the shell companies that were used to channel black money. And the government has already indicated that they will look at closing down those companies. This is important because these shell companies have been there for the past 100 years! But nobody had really done anything about closing them down and closing that loophole.
Money that was in the cupboards is now in the banking system. The government, thus, has a much better handle on where the revenues are, and how they can be included in the tax net.
While foreign investment into India has grown significantly in the past three years, what are the remaining barriers to foreign direct investment (FDI)?
One, is, of course, the ease of doing business itself. India has to continue to become much more transparent so that if a foreign investor makes an application, they should have clarity, and be able to predict ahead of time if and when they are going to get approval.
Second, the time it takes to get these approvals needs to be reduced.
Third, a single window clearance is necessary, and, fourth, a better centre-state coordination. This is already underway.
Finally, more predictability on government policies will help in boosting foreign investment so that the investor’s risk is properly balanced.
The government is trying to make these models more robust by giving the kind of assurances that were earlier not available.