Newsmaker: Pangal J Nayak

An officer and a gentleman.

In July 2002, when Pangal J Nayak, chairman and managing director of UTI Bank, left office early, a curious colleague wanted to know whether he would return after his meeting. Nayak did not reply.

As it later turned out, he was going on a month's leave-his only leave during his five-year tenure in the bank-and was determined to return only if the UTI Bank board exonerated him from his indictment in the draft Joint Parliamentary Committee (JPC) report.

He indeed resumed office only after the board gave him a clean chit.

Fast forward to December 15, 2004. Nayak decided to stay away from a marathon board meeting that was convened to deliberate on his tenure in the bank.

The decision was to split the CMD's post in two - chairman and MD - and ask Nayak to continue as the MD of the bank after his five-year term comes to an end on December 31.

Nayak rejected the offer. But he has not gone on leave this time round as anyway he will have a "holiday" after a fortnight to spend time with his family and catch up on reading.

Almost everybody who has known Nayak says the man has always played by the book. For example, unlike many of his colleagues in the IAS, he joined the financial sector only after making a clean break from the service.

He quit the IAS before taking on his assignment with UTI. It was an unusual act for an IAS officer but that is his distinctive style.

People close to Nayak say it was a foregone conclusion that Nayak would not accept the MD's post. After all, he is the main architect of a bank that is giving a run for their money to many an established bank in the syndicated loan market.

So what went wrong? Various theories have been doing the rounds. Some say that there is a move by IDBI to take over UTI Bank in due course after the merger of IDBI Bank with itself.

This will help IDBI grow faster inorganically. Nayak's presence as CMD would not have helped IDBI's cause as he has other ambitions for UTI Bank.

The fact that he is trying to list the bank on the NYSE is proof of that. One section of observers also feels that HSBC's picking up stake did not go down well with the other investors of the bank. But nobody doubts his commitment and capability as a banker.

When the JPC report indicted him, Nayak felt that more than his reputation, the report had hurt the credibility of UTI Bank, which was preparing to raise money through the placement of preference shares with foreign investors. This time, his leaving will probably derail the bank's plan to tap the American market.

A fact not so well known about Nayak is that he was part of the team in the finance ministry that implemented economic reforms in the nineties with Manmohan Singh at the helm.

An IAS officer with an impeccable record and integrity, he joined the ministry at a time when the first phase of capital market reforms had just been implemented.

The abolition of the office of the Controller of Capital Issues meant a much reduced role for the finance ministry but Naik, as joint secretary in charge of the capital markets division, understood the spirit of those changes and ensured their smooth continuation.

His stint in the ministry also coincided with the securities scam in 1993. His conduct as an officer entrusted with the responsibility of upholding the integrity of the ministry and the finance minister was exemplary.

His departure from the ministry was sudden and as much a loss to the government as a gain for the financial sector.

"Asking for cars for personal use is a perk which most of us may not be uncomfortable with, but Nayak has a different sense of ethics," says a bureaucrat.

According to bank insiders, every time the chairman visits a UTI Bank branch he pays for his lunch. When he does not carry money, a draft follows immediately.

A doctorate in economics from Cambridge University, Nayak resigned from the Indian Administrative Services and became the executive trustee at the Unit Trust of India (UTI) in 1997.

He moved to UTI Bank in January 2000. Some of is colleagues say he is a hard taskmaster and always exudes confidence. "However, at times we found him autocratic," says a UTI official.