Here is a list of New Year resolutions some high-profile Indian finance professionals and central bankers never made.
Chanda Kochhar, CEO and MD-designate, ICICI Bank Ltd
I have two New Year resolutions—consolidation and changing public perception about my bank.
Fast growth is not the right approach in 2009. Instead of growing our balance sheet, we should try to improve the composition of our deposit structure by bringing in more retail deposits. I have seen people getting excited with every crisis that’s not even remotely connected with ICICI Bank. Why does this happen to us? Is this because we are India’s second largest bank? Our phenomenal growth? Our smart ways of sniffing out business opportunities? I must find out the reason. We have changed our brand ambassador. If Shahrukh Khan’s money is safe with ICICI Bank, people should get convinced. I hate to appear at business channels again and again and say every thing is fine with the bank.
OP Bhatt, chairman, State Bank of India
This is a year of opportunities for us, the state-owned banks. We have adequate capital and government backing. Who will stop us from growing? Government’s pressure on lowering interest rates and expanding credit may not be good for the business, but we are learning to live with it.
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I wish I could go ahead with our original plan of merging all seven associates with the parent bank and make State Bank really big on a global scale. That may not happen as unions are opposing the merger plan. But they cannot stop me from opening new branches. Last year, former finance minister P. Chidambaram inaugurated the bank’s 10,000th branch in Puduvayal in Sivaganga district of Tamil Nadu. In the first week of 2009, home minister Chidambaram opened the bank’s 11,111st branch in Guwahati. We will open our 12,500th branch before the end of this year and I hope Chidambram will inaugurate that branch too even if he becomes the defence minister by that time.
M Venugopalan, CEO and MD, Federal Bank Ltd
I want to acquire Catholic Syrian Bank Ltd (CSB) in 2009. We hold only a 4.99% stake in CSB, but have managed to garner the support of at least two-thirds of the bank’s stakeholders. All we need is a board resolution accepting the merger. A merger is the only solution. Otherwise, in the next two-three years, small banks will become unviable. Earlier, I had set my eyes on Lord Krishna Bank Ltd, but was beaten by Centurion Bank of Punjab Ltd, which gobbled up Lord Krishna, paying more money. By acquiring Centurion Bank, HDFC Bank Ltd has entered Kerala and is giving us tough competition. If I can’t acquire, I need to be acquired by some other bank.
TS Narayanasami, chairman and MD, Bank of India
Everybody says I am the front-runner for the Reserve Bank of India (RBI) deputy governor’s post that has been lying vacant after V. Leeladhar’s retirement, but I am not very keen on moving to RBI. I have an excellent track record. Every year I get the maximum incentive-linked pay as I fulfil all performance parameters that I commit to the government. I will be happy to hang up my boots this year as a public sector banker. However, if they insist, I will take up the new assignment. Do I have any choice?
Rakesh Mohan, deputy governor, RBI
My only New Year wish is that the media should not decide where I should work. Yes, I could not get the top job at RBI when Y.V. Reddy stepped down, but does that mean that I should leave RBI? Have I committed a crime by not becoming a governor? Is it mandatory for a deputy governor to become the governor? Do you know that the last time an RBI deputy governor was made governor directly was before independence, in 1943, when Chintaman D. Deshmukh shifted to the corner room. I was not even born then. Immediately after D. Subbarao was made the governor, the media speculated that I would leave RBI for the World Bank. Financial papers even found my successor at RBI—chief economic adviser in the finance ministry Arvind Virmani. Now, journalists are saying I will head for the International Monetary Fund. Please leave me alone in 2009.
D Subbarao, governor, RBI
Between October and now, RBI has cut banks’ cash reserve ratio by 400 basis points to 5%; the repo rate by 350 basis points to 5.5% and reverse repo rate by 200 basis points to 4%. Overall, we have pumped in Rs3.2 trillion into the financial system to tackle the liquidity crisis.
Since mid-November, banks have been parking excess money with RBI and the overnight money market rate has come down. The yield on the benchmark 10-year government bond has declined from 8.66% in the last week of September to less than 5% in January.
Banks have started cutting their lending as well as deposit rates. I would urge banks to maintain the credit flow to bolster the slowing economy. We will continue to take decisions in close coordination with the government, but that should not give one the impression that RBI has lost its autonomy. In 2009, my resolution is to let the world know that RBI, and RBI alone, is in the driver’s seat.
Tamal Bandyopadhyay keeps a close eye on all things banking from his perch as the Mumbai bureau chief of Mint. Please email comments to email@example.com