Newsmaker: Percy S Mistry

A man of honour

Two weeks ago the Committee to make Mumbai a Regional Financial Centre (MRFC) took an unprecedented step. It met in the State Bank's Nariman Point headquarter, unanimously cleared the report and sent it to the FM.

The catch was, the report was not signed by the committee's chairman, Percy S Mistry, as he had resigned.

"He was the main proponent of the government reducing its stake in the public sector banks, which led to a clash between him and other members heading the public sector banks," said a member of the committee.

Mistry, a former World Bank advisor, did not comment on the controversy and directed all the queries to the finance ministry. But those who know the 60-year-old development economist say he is too polite and the clash with other committee members was "too uncharacteristic" of him.

"The report was written by him and it would be one of the best road maps ever to make Mumbai a financial centre. No one can take the credit away from him," said another member.

Armed with a doctorate and an MBA from the University of Toronto, Mistry joined the World Bank in 1981 and authored many books from African debt crisis to regional economic integration. Married to a British citizen, Mistry prefers to spend his spare time with his horses in Pune and Mumbai.

The committee was set up in November 2005 after P Chidambaram promised that Mumbai would be converted into a world-class financial centre competing with the likes of Singapore and Shanghai. The ministry chose Mistry, who was running Oxford International Associates "" an investment banking outfit "" from Oxford, and occasionally dropped into his Mumbai residence to advice Indian regulators and academia.

But the drastic suggestions made by him in the MRFC report which included privatising the government-owned financial institutions and scrapping all regulatory acts to bring in a new one, was enough to ignite a split in the committee.

In the MRFC report, Mistry referred to Indian banks as zombie banks "" meaning they would not have survived but for government support. No wonder the committee, consisting of heads of public sector banks and insurance companies, took umbrage. It was then up to State Bank of India chairman Om Prakash Bhatt to object to the report and ask for changes, leaving Mistry in the minority.

It's hardly any wonder that Mistry had to resign. Perhaps Mumbai will now have to wait for yet another development report.