Banker By Accident And Prime Minister By Accident

K C Chakrabarty – An Accidental Banker ? -
Lessons for Top Management- By Rajesh Goyal

I have come across an interesting interview of Mr K C Chakrabarty published in Business Standard (dated 30th May, 2014).   He is one of those few bankers who have remained controversial during their tenure as CMDs of PS banks and even later on as Deputy Governor of RBI.  After reading this interview, I could not resist of expressing my views on this interview and recent controversy relating to PM of India. (Click here to read the full interview: Lunch with BS : K C Chakrabarty. 

 The following article and interview must be read by every officer in banking sector as they will get the inside thoughts (e.g. his admission that now he has to now stand in queue at the airports) of top bankers after they retire.  Share it with your friends either through social media or discussions at personal level.

 One of the highlights of the above interview is his admission of the fact that “banking came to him not by design but by accident”.  It immediately reminded me of the recent book “The Accidental Prime Minister: The Making and Unmaking of Manmohan Singh”, which  is a 2014 memoir by Indian policy analyst Sanjaya Baru, who was Prime Minister Manmohan Singh's media advisor from May 2004 until August 2008.    I am sure, there is little common between two personalities i.e. Manmohan Singh and K C Chakrabarty except that both appear to have reached their positions by ACCIDENT rather than their wishes.   In the book by Baru the main focus has been on the powerless PM, and  significant power being wielded by the Congress party's president Sonia Gandhi, to whom Manmohan Singh was completely "subservient".  However, Mr Chakrabarty has never been subservient and unlike Manmohan Singh has been very vocal on various issues.

 Both of them reached to the positions where they could have done a lot more for the country / banking.    Both of them remained at the top positions for long time – Mr Singh was PM for 10 years, whereas Mr Chakbrabarty was in saddle for almost similar period as CMD of two biggest PS Banks  (BoB and PNB) and then as Deputy Governor of RBI.    Both had a chance to influence the policies of the country / banking sector which could have uplifted the poor or which could have left long term mark in the history of country / banking.  However, both these Accidental Personalities miserably failed to leave any long term marks (whenever Mr Singh will be remembered, he will be remembered for good work he did during his tenure as Finance Minister and not as PM).   Mr Singh will be remembered for failing in his mission due to his silence and not asserting his authority, whereas Mr Chakrabarty will be remembered for failing in his mission due to his outspoken habit and not taking his team along to achieve the mission of helping poor in particular and banking sector in general.   When he was CMD, he was at loggershead with most of GMs, whereas when he was DG at RBI, he was loggershead with Governor RBI.

 

In today’s India, it is not frequently that people with brilliant academic records and knowledge are able to reach the top positions.   But sometimes Accidents do happen, and such people are able to reach the top.   The moment it happens people have great hopes.   Mr Singh and Mr Chakrabarty had excellent academic records and were lucky to reach the top, but failed due to their own personality traits.   This reminds us of golden rule that one has to be balanced personality.  Now NaMo, a Tea Seller,  has reached the post of PM not by accident but his hard work and not academic brilliance.  People like Manishankar Aiyer (including Mr Manmohan Singh and Mr Chakrabarty) with education at top colleges, are finding extremely difficult to digest that a common man has reached the top post.  I hope he will prove to be much more balanced personality.



I feel the interview of Mr Chakrabarty contains many self contradictions (which some people may not agree, but I will request them to read between the lines carefully) yet I will like to quote some interesting parts which will give an insight about the thought and regrets Mr Chakrabarty has now  (He never learnt such lessons from his experience during his service).   The excerpts from interview reads:

“When he was in Bank of Baroda, he was posted for a long time in Baroda (now Vadodara), which was 1,800 km away from his adopted hometown of Varanasi, with the result that he couldn't attend the last rites of both his parents since convention dictates that the cremation must take place before sunset on the same day as the death. Then, he was shipped to Chennai from Delhi, when he became chairman of Indian Bank, and then brought back to Delhi, when he took over as chairman of Punjab National Bank (PNB), unlike many of his peers who became chairmen of banks that had their headquarters in the same city in which they were posted”.

[This shows that he regretted his posting in Delhi inspite of his being elevated to the posts of CMD with all the perks and free official visits to the place where his family was living!! It appears he wanted to be posted as CMD of a bank which had HO  either at Baroda or Varanasi ! However, during his tenure as CMD he always ensured that officers were transferred to the farthest places (except his own men).    Question arise, why even now clerks promoted to Scale I are sent 1000 kms or more away ?  What steps he took to stop such trends in banking industry?]

 Another interesting part is his admission of the fact as to how CMDs / EDs misuse their official authorities (he says he has not done so during his tenure).

 "For instance, many of my illustrious colleagues used to call for their bank board meetings in the same city where they had to attend a family wedding. I was singularly talent-less in these things,"

 Every banker is very much aware of this kind of corrupt practices, but they keep silent owing to fear of backlash from top management.    It is good that Mr Chakrabarty has admitted this fact openly in his interview.    However, the moot question remains,  What steps he took during  he tenure as DG of RBI to stop such practices?  If he has failed to bring it to light during his tenure at RBI, then how can we expect that any officer in Scale I to Scale VII can dare to raise such questions during their service?

 There is need to bring transparency in the working of the banks specially at Board level and empower the officials at the middle level to be more vocal in bringing the ills in the banking industry, or else slowly public sector banks will perish.

 

Lunch with BS: K C Chakrabarty

The accidental banker

Shyamal Majumdar & Manojit Saha 

May 30, 2014

Chakrabarty tells Shyamal Majumdar & Manojit Saha that banking came to him not by design but by accident, and that banks in India ignore the poor

Our first question was inevitable. Why, really, we ask Kamalesh Chandra Chakrabarty, did he decide to resign as Reserve Bank of India (RBI) deputy governor nearly three months before his term was slated to end on June 15 this year. To our disappointment, the answer does no justice to his public persona of a fiercely outspoken banker and regulator. "That's not for public consumption," Chakrabarty, dressed in an immaculate two-piece black suit, demurs before proceeding to provide us with details of his excellent equation with all his bosses at RBI.

We take the cue and try, quite reluctantly, to change the topic, but the vintage Chakrabarty is back in a jiffy. As we settle down at Fenix, the restaurant at the sprawling lobby of the Trident hotel at Nariman Point, he volunteers to talk "in general" about a couple of issues. First, one should leave when people miss you and not when they "start kicking you". Second, he has still not been able to figure out the exact retirement age of RBI deputy governors. Sixty-two, we say. But Chakrabarty counters that by saying four of the previous deputy governors retired on either side of 62; in fact, most got extensions beyond 62 years. He doesn't understand why there should be different retirement age for different people and why such decisions should be ad hoc or discretion-based. In fact, regarding one deputy governor, both the finance ministry and RBI wrote in the files that there is no retirement age for RBI deputy governors.

The question before him, thus, was simple. If there is no official retirement age, then he should choose when to retire since he didn't "want a bureaucrat to take that decision."

"I can't decide on the day of my death; that's God's prerogative. But in a democratic country, one has the power to decide on his retirement date," he says.

He isn't finished yet and gives us a third "issue". Never in his life has he worked for more than five years in one position since he is a firm believer of the fact that after a point, one has nothing new to offer in the same position: "I have worked for five years as deputy governor, with more or less the same portfolio... and sometimes without a portfolio." The last bit is a reference to August 2010, when he was stripped of most of his key portfolios a few days after his reported public comments on why RBI should be more aggressive in combating inflation. Chakrabarty clearly has that rare ability to laugh at his own expense. When reporters asked him to comment on an RBI policy initiative, he had famously said "Do you want me to be stripped of the Rajbhasha portfolio as well?"

Chakrabarty orders chicken clear soup and assorted baked vegetables, saying he stopped having a full meal for lunch many years ago. We make up for his frugal order by ordering rice and "railway mutton curry", prompting Chakrabarty to say wistfully that he used to have rice for breakfast as well as lunch during his childhood in a tribal area in Odisha, where his father was posted as a doctor in a missionary hospital. The only male among six siblings of immigrant parents who moved to India from then east Pakistan, he was later sent to his grandparents in Varanasi, so that he could get a decent schooling.

Even close to four years after the "punishment" by then RBI Governor D Subbarao (he subsequently regained most of his key departments), Chakrabarty remains unapologetic and says but for his outspokenness, the world would have not known that he has a different view on inflation. "In hindsight, one can say I wasn't liked for speaking the truth. But I certainly wasn't punished because less work can't be considered a punishment. If I were to be punished, I should have been given more work," he says with a big smile. In any case, he has differed with his bosses at every stage of his 42-year career. In fact, on a number of occasions, he differed with various finance ministers openly. "No one can be punished for having a difference of opinion but when a decision is taken by my superiors, it's my duty to implement it," he says.

Chakrabarty says he is extremely lucky to have had the opportunity to work in the public sector since outspoken people like him would have surely been thrown out in the private sector. In the public sector, the punishment for outspoken and no-nonsense people who refuse to indulge in lobbying is limited to either not getting a choice posting or transfers. For example, when he was in Bank of Baroda, he was posted for a long time in Baroda (now Vadodara), which was 1,800 km away from his adopted hometown of Varanasi, with the result that he couldn't attend the last rites of both his parents since convention dictates that the cremation must take place before sunset on the same day as the death. Then, he was shipped to Chennai from Delhi, when he became chairman of Indian Bank, and then brought back to Delhi, when he took over as chairman of Punjab National Bank (PNB), unlike many of his peers who became chairmen of banks that had their headquarters in the same city in which they were posted.

The lesson he learnt is that if you want to do some plain-speaking and be nobody's man, then your conduct has to be like Caesar's wife - that is beyond suspicion - and you should not seek any personal favours from anybody. "For instance, many of my illustrious colleagues used to call for their bank board meetings in the same city where they had to attend a family wedding. I was singularly talent-less in these things," Chakrabarty says, adding whenever a minister or an important politician wanted him to do something against his wishes, he used to always insist on written instructions. "Half of my problems were sorted out because of that," he adds.

He orders green tea and says banking came to him not by design but by accident. A brilliant student with a knack for numbers, Chakrabarty scored a gold medal in MSc (statistics) followed by a PhD and the inevitable teaching route at Banaras Hindu University, which lasted five years. But he didn't want to spend the rest of his life regurgitating the same lessons over and over and applied for the post of planning officer in Bank of Baroda. Despite his growing reputation as someone who is unwilling to cut corners, the promotions came fast throughout his 26-year stint at Bank of Baroda - later, he became executive director of PNB, before becoming chairman of Indian Bank and then PNB.

The valuable lesson he has learnt is that banks in India continue to ignore the poor, despite the fact that they are more bankable and more credit worthy. While his opinion about the quality of management in public sector banks is well-known ("non-performing administration" and so on), Chakrabarty says most banks are underperforming because there is no pressure of competition. That is why, he says, India needed more banks. Instead, from 1947 onwards, the number of government banks in the country has been reduced.

So what explains the four-year delay in issuing new bank licences, we ask. "Reluctance and incompetence," is the short answer.

As we wait at the lobby for his car, Chakrabarty says he hasn't decided on his future, though he is firm on not taking up a full-time role; 42 years of non-stop work have been long enough. Offers have been flowing in but he would take his own sweet time before taking up something - possibly in part-time consultancy or research. "Though I would love to spend time reading books, my wife has already started asking me to go out and keep myself occupied. After all, she is not used to seeing me at home," he jokes.

At this point, however, he is caught up in a more mundane issue: transition from an exalted existence of so many years to that of a common man's daily issues. For example, he had to go through a maze of formalities before getting a new phone connection at a temporary residence in Mumbai. "I have forgotten how to stand in queues - even at the airport, there was always someone else to take care of the formalities. But I will learn fast," he says. To make the transition easier, Chakrabarty is planning to live abroad (his son is based in the UK) for a few months where he has to do everything for himself anyway.

With a dubious legacy, "accidental prime minister" Manmohan Singh bows out-DNA

Monday, 19 May 2014 -

When it was clear that he was set for a stunning election victory last week, India's Narendra Modi sent a message that read simply "India has won": It instantly set a record as the country's most retweeted Twitter post.

And yet two days earlier the top trend on Twitter India had been #ThankYouDrManMohanSingh, a popular tribute to Manmohan Singh, who bows out after 10 years as prime minister with deep respect even if voters thrashed his party in the polls.

Singh will be remembered for the reforms he drove through as finance minister in 1991 that prised open a state-stifled economy. In his budget speech that year, he quoted Victor Hugo, saying "No power on earth can stop an idea whose time has come".

Those reforms snapped India out of a shuffling rate of growth of that time, lifted millions out of poverty and propelled the country into the league of dynamic emerging economies.
In a blizzard of commentaries examining 81-year-old Singh's legacy in recent weeks, the Oxbridge-educated economist has been praised for his intellect and personal integrity, and world leaders have reached out to wish him well in retirement.

And yet Singh's stock tumbled during his second five-year term as economic growth skidded, inflation ballooned and spectacular corruption scandals clattered like skeletons out of a cupboard. His public silence on many matters became the butt of jokes, including one which said movie theatre patrons were being asked to put their mobile phones in "Manmohan mode".
Singh struggled to fend off the perception that the real power in his government was Sonia Gandhi, leader of the Congress party and widow of former prime minister Rajiv Gandhi, whose family has ruled India for most of the time since independence from Britain in 1947.

In a book published during the election campaign, "The Accidental Prime Minister", a former media adviser said that Singh allowed his authority to be undermined by Gandhi. "You must understand one thing. I have come to terms with this," the author, Sanjaya Baru, recalled the prime minister telling him in 2009. "There cannot be two centres of power. That creates confusion. I have to accept that the party president is the centre of power. The government is answerable to the party."

Singh's spokesman dismissed the book as an incorrect interpretation of the prime minister's decade in power, but the memoirs only served to reinforce a popular perception that an extra-constitutional authority had called the shots for years.
FATHER OF REFORMS
The only prime minister since independent India's first leader to serve two full five-year terms and the first Sikh to have held the office, Singh told his final news conference that history would in the end be kind to him.

Swaminathan Aiyar, a prominent Indian journalist, said that Singh's achievements would indeed become his story. "People will forget Manmohan Singh's failings, and remember him as the father of economic reform and superfast growth," Aiyar wrote in a Times of India commentary.
Born into a poor Sikh family in a part of British-ruled India now in Pakistan, Singh studied by candlelight to win scholarships to Cambridge and Oxford, earning a doctorate with a thesis on the role of exports and free trade in India's economy.

He held the top finance and economic planning posts in India's bureaucracy for decades and was also head of the central bank before joining the cabinet in 1991. He became prime minister in 2004 when Sonia Gandhi, who led the Congress party to a surprise victory, declined the job fearing her Italian birth would be used by Hindu nationalist opponents to attack the government.

As prime minister, Singh sought to liberalise the economy further. However, he often ran into resistance from wayward allies in his coalition government and from his own left-leaning party, which prioritised welfare schemes such as a jobs programme for the rural poor.
In 2008, he stood up to his party's one-time communist allies over a civilian nuclear energy deal with the United States that took his country out of decades of diplomatic isolation over its atomic weapons programme.

Singh saw India's growth story wobble in the last years of his premiership as global economic turbulence combined with a policy paralysis at home battered the investment climate.
His second term was also overshadowed by mass protests against corruption, and he was widely criticised for apparently turning a blind eye to the graft raging around him.

Harish Khare, who served as the prime minister's media adviser from 2009 to 2012, described Singh in an article for the weekly magazine Outlook as "spectacularly unflamboyant", but credited him for making historic course corrections that brought India more social harmony, equity and regional peace.
A leader of the Bharatiya Janata Party, which routed Congress in the election, praised the outgoing prime minister for his "dignity and grace" but like many voiced doubt about his overall record. "It was the inability to speak up within his own party that may compel the historians to take a different view of the man," Arun Jaitley said in an article sent to media last week. "Only if he had stood up at the right time and disagreed he would have been regarded with still a greater honour

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