Here is a list of new year resolutions that high-profile financial sector leaders and regulators never made.
Also Read | Tamal Bandyopadhyay’s earlier columns
O.P. Bhatt, chairman, State Bank of India
I wanted to help the Indian economy grow at the time of crisis, but I am being continuously teased by my fellow bankers and even the regulator for this.
What’s my fault? In the thick of the credit crunch, when everyone loathed lending, I made the cost of home loans cheaper. Being the nation’s largest lender, I wanted to lead from the front. The idea was to give consumers cheap money for the first two to three years, generate demand for loans and raise the loan rate afterwards. By that time, the economy would be back on the growth path and the customers’ paying capacity would increase. Mind you, every loan application was scrutinized to check the customers’ capacity to bear the higher cost later. So any apprehensions that bad assets would pile up were completely unfounded. We wanted to create demand for homes to boost growth, but everyone started finding fault with the product, calling it a “teaser loan”.
The funniest part is that even those who blamed me for destroying the market by offering such loans sold the same product because they were scared of losing market share. I will never the make the mistake of offering teaser loans this year even if I head a private mortgage firm after my retirement in March.
K.C. Chakraborty, deputy governor, Reserve Bank of India
No more talking. In 2011, I will learn the art of sign language. During my commercial banking days, I was told central bankers don’t talk, and I respected that. But I never knew that a central banker is not entitled to express an opinion even in private. Press reports say I spoke about rising inflation and the need to raise rates to fight it. It is something axiomatic—like saying that if you bite a chilli your tongue will burn. Despite that, I denied it because I had never said that in public.
My portfolio has been cut, but I am not unhappy with that as I have more time these days to learn sign language. Every day I practise it in front of a mirror that I have fixed on the wall of my renovated room. Let the reporters read my lips. Also, I will get a private tutor to learn Hindi as rajbhasha is part of my new portfolio.
Vikram Akula, chairman, SKS Microfinance Ltd
My New Year resolution is to hold all board meetings of SKS Microfinance at Lal Bahadur Shastri stadium in Hyderabad. I am sick and tired of explaining to people why Suresh Gurumani was sacked. It was a board decision and I hadn’t played any role, believe me. After listing, we needed to take the company to the next level and Gurumani was not up to it. Yes, indeed, he was instrumental for the success of SKS’ initial public offering, but we couldn’t offer him a lifetime CEO job as business compulsions changed after the IPO. The board sacked him and every member endorsed the decision, but the journalists don’t trust me. They are projecting me as the villain. The only way to end this mistrust is by holding board meetings in full public glare. Let everyone hear what we discuss, see how we sack people, and know why we price our shares differently to different private equity investors.
U.K. Sinha, chairman, UTI AMC
Newspapers and TV channels have reported that I am the next chairman of the Securities and Exchange Board of India. I don’t know as yet whether I am moving there, but if that happens, I would like to move the Sebi headquarters to Delhi, for two reasons.
First, my current office is at Bandra Kurla Complex in Mumbai, walking distance from the Sebi office. If you’re operating in the same locality, you won’t feel that you have got a new assignment, no? The second reason is equally compelling: if we shift the headquarters to Delhi, we can consult the finance ministry on all critical decisions. Not that the ministry wants to be consulted, but once upon a time the capital market was looked after by a government department—part of the finance ministry. Indeed, Sebi is an independent regulator but one shouldn’t forget history. It will also be easier for those market intermediaries who spend most of their time at North Block seeking ministry intervention in Sebi decisions. If Sebi is located close to the finance ministry, they can cut down their travel time and the flights between Mumbai and Delhi.
D. Subbarao, governor, Reserve Bank of India
I don’t know whether I will get another term or not after my three-year tenure ends in September. Let people speculate; I don’t bother.
My new year resolution is giving licences to a new set of private banks this year. This is easier said than done. Should we give licences to five or 10 players? Should we mix and match non-banking finance companies with microfinance institutions and big industrial houses? Or should we keep the industrial houses out? Should we fix the initial capital requirement at Rs1,000 crore or less?
I want to go ahead the following way: first, a committee will look into the eligibility of non-banking financial companies.
Then, another committee on microfinance institutions; a third committee on big industrial houses; and a fourth on professionals. After we put up all these discussions on our website, there will be a fifth committee to analyse public comments and prepare draft guidelines. Once the final guidelines are cleared by a sixth committee, there will be a seventh committee to screen the applications before they come to us. We will play back the list to the finance ministry.
Tamal Bandyopadhyay keeps a close eye on all things banking from his perch as Mint’s deputy managing editor in Mumbai.
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