Resolutions never made

After a year of serious commentary on banking and finance, typically the last column of the year is a fun piece. This year is no exception

After a year of serious commentary on banking and finance, typically the last column of the year is a fun piece. This year is no exception. So, here’s a list of New Year’s wishes that bankers never made—with malice towards none.

Arundhati Bhattacharya, chairman, State Bank of India

I have a view and I’m not afraid to talk about it openly—the repo rate is a blunt tool. How can a cut in the repo rate force us to pare our loan rates? After all, the loan rate depends on the cost of money—the rates we offer on our deposits, the primary source of funds for all banks in India. The repo rate affects the market rates, but do we borrow from the market to lend? We don’t. Despite that, my home loan rate is the lowest in the industry. Isn’t that proof that we care for our customers?

Now that the base rate calculation has changed, of course, we will see how to transmit the Reserve Bank action. But it will be easy to do if the rate cut comes along with a cut in the CRR (cash reserve ratio). My predecessor, Pratip Chaudhuri, cried hoarse, asking for a cut in the CRR. I wish the next time the Reserve Bank cuts its repo rate, it is accompanied by a cut in the CRR. If that happens, I will keep less money with RBI on which I don’t earn any interest. I will be happy to pass on the benefit to my borrowers. My New Year’s wish is a cut in CRR along with a repo rate cut. Of course, it will change, if my job profile changes.

P.S. Jayakumar, managing director and CEO, Bank of Baroda

I will change the bank. My long stint at Citibank and later at a mortgage firm has given me financial security. I could have indulged in philanthropy or even started a microfinance organization, but I decided to take up the assignment at Bank of Baroda as I am always looking for a new challenge. Frauds cannot deter me. Both Ravi (Ravi Venkatesan, chairman of Bank of Baroda) and I are determined to play the role of change agents.

I know people talk about lack of efficiency and expertise in public sector banks. This is a myth. Our executives know their job well and take enormous pride in what they do. All I need to do is to hold a few classes to teach them a few things and reignite their passion for work. Also, I will offer them stock options. Let them own the bank—that will do the trick.

M. Narendra, former chairman and managing director, Indian Overseas Bank

I have seen one newspaper report likening me to a naughty boy in a toy shop. I am neither naughty nor a boy. I would have preferred to be called a bull in a China shop.

Yes, I am a bull. Barely a month after I was made the boss of IOB in November 2010, I made it public that I would grow the bank’s total business (deposits and loans) to 2.5 trillion by the end of that year. I actually exceeded my target. I chased growth till my last day in office.

I know everybody is blaming me for ballooning bad loans in IOB. But what else could have I done? I could have either gone for quality or growth—we can’t do both. One can easily ensure quality by close monitoring and risk management, but growth is something that’s difficult to achieve. One needs to pay higher rates for collecting deposits more than other banks and once you have the deposits, you can give money to all the borrowers who ask for it. Why should I be stingy? After all, it’s public money, not my own.

My New Year’s wish: Let the government make it clear that those bank bosses who shut their eyes to growth and care only for quality will not get their retirement benefits. We need growth. This should be the key result area for every bank chief.

Usha Ananthasubramanian, managing director and CEO,
Punjab National Bank

I don’t agree with Narendra-ji. I think growth without quality has no meaning. At PNB, I will ensure that. In fact, I will not lend to everybody. My stint at Bharatiya Mahila Bank has taught me that women are better borrowers then men—they don’t default in repaying bank loans. I will tell all my senior colleagues to lend only to women. There is so much we can do…

Given a choice, I would also like to take over Bharatiya Mahila Bank. That is, if Arundhati is not interested.

Chandra Shekhar Ghosh, managing director and CEO of Bandhan Bank Ltd

It has been a phenomenal launch. Within three months of opening, we have garnered so much in deposits and so many customers, exceeding all targets. Initially, I thought that we wouldn’t dabble in corporate loans, but everyone is saying that we are running too much of concentration risks in the small loan segment. Since we have so much capital, why not take a close look at IDFC Bank? With my branch network and IDFC’s loan book, we can do wonders.

Rajiv Lall, managing director and CEO of IDFC Bank Ltd

How could Ghosh-da read my mind? I have been thinking the same way. We have concentration risks and too few branches won’t help me collect deposits fast. I have started picking up stakes in smaller microfinance institutions who can outsource loans and deposits for us, but it may not be a bad idea to look at Bandhan Bank. I am a firm believer in competition and collaboration. Together we can grow.

Urjit Patel, deputy governor, Reserve Bank of India

There has been a lot of speculation on what next after 11 January. My New Year’s wish is may the best candidate win.

Tamal Bandyopadhyay, consulting editor of Mint, is adviser to Bandhan Bank. He is also the author of Sahara: The Untold Story and A Bank for the Buck.

Email your comments to bankerstrust@livemint.com.

His Twitter handle is @tamalbandyo

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