Rot in PS Banks Claims Its First Victim -
Humiliating Exit of CMD of United Bank of India -
Need for Introspection by Other CMDs / EDs-
By Sri Rajesh Goyal-(source: allbankingsolutions.con)
The news item that CMD of United Bank of India has resigned was received by banking fraternity with shock with awe. By the time this news became public, every enlightened banker was aware that the said Bank had posted huge losses in the last quarter results, but no one in the industry thought that a CMD will ever take VRS? Specially when a person like Ms Archana Bhargava is at the helm of the Bank.
This case has become a hot topic among bankers and is likely to be a test case for what is in store future of PS banks in India if timely action is not taken. There may be different versions as to what prompted her to take VRS suddenly. However, bankers need to understand the real ills which have gripped banking industry in last decade or so. She may be the first skeleton to come out, but there are many other cupboards which contain similar skeletons.
We need to peep into the existing style of top bankers, as to what kind of people are finally selected for such posts and what methods they have resorted to reach the so called coveted posts. We also have to see that how much things have deteriorated in the banking circles in last few decade or so in the tussle of power and rat race for posts of CMD / EDs . This is necessary to understand so that we know what is in store for banking industry in the days to come.
Let us go through some of the downward transformation that has taken place in last two decades or so in banking in India. This article is based on the feedback of the bankers who have been privy to these developments and shared their views as to what they saw and heard about some of the individuals associated with this episode or people who are still heading other banks after their controversial career progressions. [I am sure a large number of bankers from other banks must have witnessed such tussles in career progressions in their respective banks, as it is not restricted to one bank and is a country wide phenomenon.]
People who have worked closely with these controversial CMDs / EDs of PS Banks and /or other officials working in RBI / CVC / IBA etc etc have thrown some light on the career progression of these people who are enjoying luxury life in service or some even after service. One of the common traits among all such people, as suggested by people who worked with them, that such people used to be aggressive in lending and tried to humiliate their honest / hard working juniors at the first available opportunity but had excellent contacts with GoI officials and their top bosses.
By the turn of the century, there was a strong perception that now onwards only such people who toe the line of their bosses and help in creating assets for themselves and bosses will be able to climb the ladder as compared to their batch-mates / seniors. Though being less competent, these people were able to move upwards faster owing to their close proximity to top brass in bank and in GoI where it really mattered.
The period also witnessed the regular hushed talks about their proximity with top bosses and they being a part of the coterie / caucus at CMD level and at Finance Ministry. They were in blue eyed officers club of the CMD. As it happens, a person always learn few qualities of his / her mentor, they too seems to have learnt few controversial tricks and qualities of their boss – for example, whipping the honest officers – from more than one CMD who had made most of the GMs dummy and whipping boys during their tenure.
As time passed, the names associated with this coterie, moved up in the ladder, as they have learnt the art of downgrading and humiliating honest and hard working officers in meetings so that they do not raise their voice against misdeeds of such officials. With the help of their mentor(s) (who by this time had moved to places where it mattered most), this type of people were saddled to feel free to indulge in corruption as no one dared to touch them and lower functionaries were charge sheeted and a reign of terror was unleashed. These controversial people continued their their aggressiveness in lending, suppression of NPAs, Restructuring of big ticket NPA accounts, and bulldozing their juniors and punishing upright persons etc. All this slowly resulted in a volcanic type situation on NPA front. Thus, now most of CMDs are sitting on volcano of NPAs, which can erupt any time for any bank, as they and their predecessors have been successful in keeping lid on this.
Although, at the end of each quarter, every CMD talks about improvements in the forthcoming quarters, but from their heart they know the truth and are waiting for the end of their unscathed tenure. In the meantime large number of juniors are paying price in the form of regular charge sheets. In nutshell, most of the present CMDs / EDs have reached this stage at a much faster pace than many of contemporary who were in reality and in public perception more competent and had better human values and relations.
Let our readers be enlightened by two instances of humiliation even to officers in the rank of GM / ED. In September, 2012, an email from a banker reads “A board meeting was scheduled yesterday. One of the Major agenda was to discuss about the performance of MSMEs. The General Manager of MSME Wing, Mr. K S CHANDRAMOULI was expected to answer the questions. The Board meeting started and there were severe criticism about the performance of the bank in general and performance of wings in particular. Because of the incessant criticisms faced before from the Executive Director, (:?:?:?:?:?:?:) Mr. Chandramouli (GM) was very much disturbed. As he could not digest the words used for criticizing him, he suffered a massive heart attack and fainted during the Board meeting.”. (We are not publishing the full email as it is quite disturbing). The details of the episode must be very well known to people who were present in that south based bank, but are not ready to forthcome and admit the same.
ET report on Doggy is also an eye opener as to how juniors (may be they are EDs or GMs ) are treated by their seniors. Our reasders can click on the link given hereafter and decide for themselves who does ET is referring to : (http://articles.economictimes.indiatimes.com/2014-02-17/news/47412223_1_nachiket-mor-wackiest-whispers-and-murmurs-jp-morgan). It is absolutely disgusting and humiliating for a banker to work under such circumstances. I too had witnessed in several meetings the humiliations being inflicted on people at the rank of GMs.
People who suffered at their hands always prayed to the God that He will do justice to them. It will not be desirable for us to spell out whether justice has been done, I think, people who suffered can only be best judge in this respect, whether this is equitable justice. Many more people are waiting for more justice. Will God oblige them? We have to wait and watch.
I believe this is high time that each and every CMD and ED of PS Banks must introspect by keeping his hand on his heart and asking whether he would have reached this stage, had he not indulged into unethical practices? I am sure only very few would be able to answer in affirmative.
I will be analyzing further about the present scenario and who are responsible for this situation, and what needs to done now, in my forthcoming article.
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