Neeraj Swaroop to head StanChart’s SE Asia ops3 min read . Updated: 03 Jul 2011, 04:55 PM IST
Neeraj Swaroop to head StanChart’s SE Asia ops
Neeraj Swaroop to head StanChart’s SE Asia ops
Mumbai: Neeraj Swaroop, regional chief executive officer, India and South Asia of Standard Chartered Bank, will soon take over as regional chief executive, Southeast Asia, and relocate to Singapore, according to two bank officials.
A Reserve Bank of India (RBI) official, too, confirmed that Jaspal Singh Bindra, group executive director and chief executive officer of Asia, at a recent meeting with the central bank indicated that Swaroop will take over a new assignment outside India.
None of them was willing to be named as the development has not yet been made public.
Swaroop declined to comment on the matter.
He will take over from Ray Ferguson who is currently chief executive for Southeast Asia, that covers 10 markets.
Swaroop may take up the assignment in next three months and the new India head will probably be appointed from among the existing senior executives of the bank working in India, according to one of the executives. “The process has not yet started. Swaroop’s elevation has come to us as a surprise," he pointed out.
Swaroop joined the bank in August 2005 from private sector lender HDFC Bank Ltd, where he was heading the retail business.
During his stint, the bank’s assets have grown from Rs37,286 crore to Rs95,000 crore. Its pre-tax profit rose from $223 million in 2005 to $1.19 billion in calendar 2010, making India the largest contributor to the global profit of the British bank that operates in at least 70 countries.
The highlight of Swaroop’s stint was the $588 million Indian depository receipts (IDRs) issued in May 2010. Standard Chartered Bank is the only overseas firm to have listed its shares in India through this route.
IDRs are securities that represent an ownership interest in a fixed number of underlying equity shares of the issuing company.
His stint has had its share of controversies with the Indian banking regulator probing Standard Chartered Bank’s stake in Tamilnad Mercantile Bank Ltd (TMB). Mint reported this in April.
RBI probed whether Standard Chartered owned more than the permitted 5% stake TMB through a series of transactions involving an escrow account managed by its Mauritius arm.
Under India’s banking laws, no entity can own more than 5% in an Indian bank without RBI’s approval. While on paper, StanChart owned only 4.64% through a subsidiary, it could actually own more through the escrow account.
The account was operated by US based private equity fund Corsair Capital Llc to facilitate the purchase of a 33% stake in TMB that was held by non-resident Indian businessman C. Sivasankaranin 2007. A total of 18 investors acquired shares in TMB, with 12 of them holding the stock through the escrow account.
Standard Chartered Bank first issued a loan to one of the investors and subsequently bought TMB’s shares from this investor and one other, according to RBI.
These transactions did not have RBI’s approval according to an order issued by deputy governor Anand Sinha, which raised doubts whether the investors were acting in concert with Corsair or “third parties" attempting to wrest control of the Indian bank.
Standard Chartered is also one among the 19 banks that were penalised by RBI early this year for non-compliance of norms while selling derivative products.
The UK bank has not opened a single branch in India for the whole of 2010 and so far in 2011. RBI also initially declined to clear Swaroop’s bonus for 2010 but later gave the go-ahead to the bank.
Incidentally, early May RBI had said chief executives of foreign banks based in India should be directly responsible for all regulatory and statutory compliance and not functional heads sitting overseas, tightening controls on foreign lenders in India.
The action from RBI comes because “there have been concerns about regulatory compliance of foreign banks because the business heads report to functional heads overseas," it said, but did not elaborate on the concerns.
RBI said that for all foreign banks operating in India, “the CEO would be responsible for effective oversight of regulatory and statutory compliance as also the audit process and the compliance thereof in respect of all operations in India."
Standard Chartered is the second biggest foreign bank operating in India in terms of assets, after Citibank, but it has the largest branch network with 94 branches, about one-third of all foreign bank branches in the country.
Foreign banks account for about 7% of banking assets in India.