Tamal Bandyopadhyay: Resolutions 2005

Or, what financial sector leaders might be thinking in the new year

A K Purwar,
Chairman,
State Bank of India

North, south, east or west, State Bank is the best. So far, I have emphasised world-class services. My New Year resolution for 2005 is to make State Bank a truly global bank. And why not?

The Banker's list of top 1,000 banks of the world last July put State Bank at no. 82. This is extremely embarrassing. We must go up the ladder. After all, we are a giant in India, accounting for more than one-fifth of the banking industry.

We are now seriously looking for a bank in Asia, Africa, Europe and the Americas. Given a choice, I would have loved to take over a bank in one of the neighbouring countries.

Unfortunately, that is not possible because India does not have the most-favoured nation agreement with them. But that does not stop me from looking for a bank in the deep caverns of Africa or the sophisticated financial markets of the West Coast.

If we can't find a match there, we will acquire a building society in the UK. We have already completed our due diligence. There are 63 building societies in the UK with total assets of over £230 billion.

About 15 million people have building society savings accounts and over 2.5 million are currently buying their own homes with the help of building society loans.

So, if we acquire one, we have a toe-hold in the UK mortgage market, which is in synergy with our focus on the domestic home-loan market.

The deal will also help wipe out the bad memory of SBI European Bank plc (Sebal). We could not run our UK operations through this subsidiary and shut it four years ago in 2001. Now, we will bring the wheel a full circle and take over a UK outfit.

I am not ruling out a domestic acquisition either, although at this point it's an expression of interest. But if you ask me about the merger of the seven SBI associate banks with the parent, I will politely tell you to check with the trade unions and officer associations. That's not a part of my New Year resolution.

M Damodaran,
Chairman,
IDBI

IDBI Bank will soon be merged with IDBI. I expect the entire process to be over by March. What next? The media has spoken about merging UTI Bank with IDBI.

That's a baseless speculation. There was never any such plan. Those who have been talking about this should take a look at Article 4 of the Articles of Association of IDBI Ltd.

It clearly says that the Central government must, at all times, maintain a minimum shareholding of 51 per cent in it directly and not through any government-owned organisation.

This clearly means that I must have a public sector bank on my plate. For the uninitiated, let me explain. There are 19 nationalised banks in the country where the government holds more than 51 per cent stake (in some cases, even 100 per cent stake).

IDBI is a suitable boy and I am sure there will be nationalised banks who would have loved to tie the knot with it. All I want is a mid-size bank with a clean balance sheet, good asset quality, low non-performing assets, high profitability, branches across the country and a lean and hungry workforce with high productivity.

The government has supported us in bringing back IDBI back on track. I would not ask for any more monetary support. At best, we'll ask for a bank. Is that too much to ask?

Cherian Verghese, CMD,
Union Bank

Of all bank CEOs, I have the most difficult task this year. I have many plans but can't talk about them because of regulatory restrictions. After all, this is all market-sensitive information.

When two banks merge, the most difficult job is managing people. I will have to do that. And mind you I don't have much time since I retire in March next year.

Already, the trade unions have started protesting against the move, but I know my job. Maybe that's why the government has chosen me at this time.

People say I worked wonders in South Indian Bank which I headed on deputation in the mid-1990s. Later, as an executive director in Central Bank and CMD of Corporation Bank, my agenda was to involve the people in bank operations and make them feel proud of their institution.

Banking is all about relationships and unless the employees are happy, they cannot excel in their jobs. I will make sure that they are happy and once my bank and Bank of India merge, we will be able to leverage people's power in the true sense of the term.

Though it's been only about a month since I have joined Union Bank, I feel at home here. But when the headquarters is shifted to the Bandra Kurla Complex after the merger, I will miss the lovely roof garden at Union Bank.

A K Khandelwal,
CMD,
Dena Bank

My job for 2005 is cut out. First, I need to make my bank's public issue a grand success. Then, there's the merger with Bank of Baroda. By that time, however, it will not remain my bank as I am likely to succeed P S Shenoy in Bank of Baroda. At least, that's what the media reports have suggested.

Dena will come out of the woods by the end of this financial year. It's capital adequacy ratio will go up and net non-performing assets will come down to a respectable level. It will be an ideal match for Bank of Baroda. The two will create a strong financial intermediary in western India.

I am confident that if the government gives its nod, it will work. Ask my why? Look at the background. In case of the Union Bank-Bank of India merger, Bank of India's present chairman was Union Bank's executive director. He could talk to his former boss and took forward the proposal smoothly as he knows both the banks well. My case is similar. Before taking over the Dena Bank assignment, I was the executive director of Bank of Baroda. Thus, I know both the banks well. Now all I need is to talk to Shenoy and convince him. Next, both of us should go to North Block with the confidential file. The only problem is Shenoy is retiring soon.

P S Shenoy, CMD, Bank of Baroda, M Venugopalan, CMD, Bank of India; PS Kohli, CMD, Punjab National Bank; BD Narang, CMD, Oriental Bank of Commerce

We have steered the banking industry through its most difficult phase when interest rates were falling and we had to chase government securities to make money. The media mocked us, dubbing it lazy banking. But we have also done crazy banking when interest rates started shooting up and the finance ministry wanted us to return to nature and pour money on agricultural land and mandis.

We chased farmers with equal zeal as the 10-year benchmark government security. We also had innumerable board meetings to finalise the tenders for software vendors to put the right technology in place.

Like politicians, bankers never retire. We would expect the government to reward us suitably after we step down over the next few months.

Now that the fourth deputy governor's position is filled in, the government should create more board berths in Securities and Exchange Board of India (Sebi) and more members at the proposed pension regulatory body. Don't push us into becoming a banking ombudsmen, please.

G N Bajpai,
Chairman,
Sebi

My eventful assignment comes to an end soon. I did whatever I could. My only unfinished agenda is the implementation of the T+1 settlement system that we could not do as the RTGS (real time gross settlement) system was not in place.

There has been criticism on ( Securities Appellate Tribunal) SAT reversing the all-important Sebi orders but that shows how democratic our system is. I take pride in making the securities market vibrant and protecting investors' interest.

I am sure the government will use my expertise in some form or other after I step down. Being a chairman, I can't ask for a director's post on the Sebi board. But I would not mind a Rajya Sabha berth.