CFO_Vol-2- Issue - 2_February 2015_Ipad

Saving Credit
Raguram Rajan,
Governor, RBI p.18
CFO Profile
Harak Banthia
p. 26
Lounge Cars
Audi RS7
P. 42
Volume 02
Issue 02
CFO India
Raghuspeak : Saving Credit
CFO Profile : Harak Banthia
Lounge Cars: Audi RS7
Indian banks, especially the public sector
banks, are being asked to do more than ever before.
CFO India maps out the changes that are on the anvil.
A 9.9 Media Publication
February | 2015
18 saving credit
Credit needs to be saved from creditors, says Dr Raghuram
Rajan, Governor, Reserve Bank of India
in practice - arbitration
30 why Indian firms prefer to go
abroad to fix legal woes?
Speedy dispute resolution and fewer legal hassles prompt
Indian firms to opt for arbitration proceedings overseas.
Leaders World
40 key questions for leaders
in 2015
Asking the right questions is often the key to
discovering the path ahead to progress.
in practice - technology
36 Governance gets a tech impetus
Two separate projects show the way on how present day
governance models can gain from technology inputs.
ProfileOn the fast
Harak Banthia
When a venture achieves
steady state, he believes it is
time for him to look for new
Indian banks, especially the public sector
banks, are being asked to do more than ever
before. CFO India maps out the changes that
are on the anvil.
Cfo lounge
42 on wheels | Audi Rs7
45 gizmos | Gionee elife s5.1
46 Book | Coping with mid-career crisis
policy capsule
24 us promises $2 bn
for clean tech
PM Narendra Modi and Barak
Obama, US President to callaborate in the area of clean energy and
combact climate change.
44 The CFO Board
Cover design Peterson PJ
AD index
Bharti Airtel IFC | Lease Plan 3 | Alcatel 5 | Sodexo 9 | ANZ Bank 11 | Epson ibc | Accenture BC
from the
Shalini S. Dagar
Volume 02 | Issue 02 | FEBRUARY 2015
Managing Director: Dr Pramath Raj Sinha
Money &
Its Managers
One character repeated endlessly in the Hindi films of certain era. It
was the nasty money lender in the 60s. An Indianised Shylock. The
nationalisation of Indian banks put paid to these villains who gave way
to the nasty industrialist and villains of other hues and other reasons.
As the government and the Reserve Bank of India try another
dramatic transformation of the banking system, it is time to look for
another version of the Indian villain. In the 21st century, while Wall
Street and the Western world found their 1%, India is still searching.
It is perhaps going to be the large borrowers who have subverted
the banking system in the past lending weight to the phrase ‘crony
capitalism.’ The gloves are coming off. In a recent interview to the
New York Times, Reserve Bank of India governor, Raghuram Rajan
said, one of the big focuses of the last few months has been, “How
do we get the big promoter to absorb the losses and not shove it onto
banks? And how do we make sure that the system works for everybody in the same way?”
Our cover story this month trains the lens on some of the radical
changes that are in the offing. Please do check it out and let us know
whether we captured the spirit of the transformation. In tune with
the times, we have a fabulous speech by the RBI Governor as part of
the package.
Another very interesting article is around the urgent need for India to
develop arbitration processes that work effectively.
For inspiration check out our CFO Profile of Harak Banthia who has
made some big moves in his career. Leadership coach and motivation
speaker David Lim as always sparkles.
Last month, CFO India was involved in another pathbreaking initiative known as the CFO Board. Liked-minded senior finance professionals have come together under the chairmanship of former SEBI
chairman, M. Damodaran to form a think tank for finance-related
issues. Check out our coverage for more on this inspirational idea.
February is a good month to get inspired. Over to North Block.
We are ready and waiting, Mr Jaitley.
EDITOR: Anuradha Das Mathur
managing editor: Shalini S. Dagar
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CFO india
F A B R U ar y 2 0 1 5
February 2015
Well done
The articles are very informative and well written.
Continue the good work and look forward to
reading more such articles this year too.
– Ujwal Ravi Kadri
General Manager, ERIEZ Magnetics India
Your voice can make a change: Share your viewpoint on
what’s happening in the community and your feedback on the
magazine at
civil society role in ppps
good for update
The articles on PPP in the January issue of CFO
India certainly capture the zeitgeist of the Modi era.
I feel the involvement of the civil society is critical
in the successful implementation of the PPP
projects. Also the government should be willing
to share the risks associated with large PPP
projects instead of making the private sector solely
responsible for the outcome.
– K. Raghupathi
Director, Avasarala Tecnologies Ltd
The January issue of CFO India was very useful. It
helped us update some data for quick decisions.
– RS Kartick Baabu
Finance head, GoFrugal Technologies
The anniversary issue was outstanding and is
testimony to what can be done with a magazine.
Congratulations and please do not stop.
– Hemant K. Ruia
CFO & Head, IS & Legal, Agrotech
The January issue was very insightful.
– DD Jalan
CFO, Vedanta Resources Plc
The January issue revealed an eclectic mix of topical,
newsy, therapeutic and infotaining articles. The
writing was crisp and the style was racy. Good stuff!
– Ranjeev C. Dubey
Managing Partner, N South Advocates
Yet another...
Your team is doing a great job.
– Sudip Mehta
DGM, Corporate Affairs, M&M Financial Services
CFO india
February 2015
And some MORE...
Hearty congratulations on completing an extremely
impactful five years. The magazine has clearly
evolved into a thought provoking medium for
various finance, corporate governance and business
matters. I quite liked the format of the anniversary
issue and the specific opinions that were solicited
for each. India is on the cusp of a possibly fast and
steep upswing and the business environment is no
exception. The thoughts you have raised are integral
to keep in mind as the country pursues this positive
thrust towards sustainable growth.
– Sathya Kalyansundaram
Director of Finance & administration
Bally Technologies India
Plus Plus/DEC/2014
We offer complete technology
solutions & services under one roof !
2014: The warmest year for
Earth since 1880
LAST YEAR was the hottest on earth since record-keeping began in 1880,
scientists reported The New York Times, underscoring warnings about the
risks of runaway greenhouse gas emissions and undermining claims by
climate change contrarians that global warming had somehow stopped.
Extreme heat blanketed Alaska and much of the western United States last
year. Records were set across large areas of every continent. And the ocean
surface was unusually warm virtually everywhere except near Antarctica,
scientists said, providing energy that fueled damaging Pacific storms.
In the annals of climatology, 2014 surpassed 2010 as the warmest year.
The 10 warmest years have all occurred since 1997, a reflection of the
relentless planetary warming that scientists say is a consequence of human
activity and poses profound long-term risks to civilization and nature.
“Climate change is perhaps the major challenge of our generation,” said
Michael H. Freilich, director of earth sciences at NASA.
CFO india
February 2015
Of the large land areas where many
people live, only the eastern portion
of the United States recorded belowaverage temperatures in 2014, in sharp
contrast to the unusual heat in the
West. Some experts think the weather
pattern that produced those extremes
is an indirect consequence of the
release of greenhouse gases, though
that is not proven.
Scientists said the most remarkable
thing about the 2014 record was that
it had occurred in a year that did not
feature a strong El Niño, a large-scale
weather pattern in which the Pacific
Ocean pumps an enormous amount
of heat into the atmosphere. Skeptics
of climate change have long argued
that global warming stopped around
1998, when an unusually powerful El
Niño produced the hottest year of the
20th century. But that temperature
is now being surpassed every four or
five years, and 2014 was the first time
without a significant El Niño. Gavin
A. Schmidt, head of NASA’s Goddard
Institute for Space Studies said the
next strong El Niño would probably
rout all temperature records.
Earth hottest in ‘14 ...............................................Pg 06
CFO Book: ........................................................... Pg 08
Jargon Buster: Turbo Charge................................ Pg 08
CFO Movements...................................................Pg 09
Is your company ready for GST?
Still need work
current POLL question
Do you think your demands will be
fulfilled by FM in the Union Budget?
Vote now at
Nytol risks Alzheimer
Ever Seen a
Green Comet?
If you were looking up at the sky the
past couple of weeks you may have noticed a
greenish glow.
That was Comet Lovejoy, also known as
C/2014 Q2, passing through the solar system
more than 50 million miles away from our
own planet. Astronomer Terry Lovejoy from
Queensland, Australia is the man who discovered the comet and four others like it in
previous years.
Various astrophotographers point their
cameras towards the sky to catch a glimpse of
the passing comet this month.
Lane’s photograph of Lovejoy was created
using a series of three long-exposure shots
from rural Kansas.
The comet was visible throughout the
Northern Hemisphere since last month and
was expected to reach its peak visibility in
OVER-THE-COUNTER sleeping aids and hayfever treatments can
increase the risk of Alzheimer’s disease, a study recently found. The
sleeping medication Nytol and anti-allergy pills Benadryl and Piriton
all belong to a class of drug highlighted in a warning from researchers. The Guardian reports that each of these drugs has “anticholinergic” blocking effects on the nervous system that are said – at higher
doses – to raise the likelihood of developing Alzheimer’s and other
forms of dementia significantly over several years. Other drugs on
the risk list include older “tricyclic” antidepressants such as doxepin,
and the bladder control treatment Ditropan (oxybutynin).
Many of these medicines are taken by vulnerable older people,
according to the scientists, who say their findings have public health
implications. Anticholinergic drugs
block a nervous
system chemical
transmitter called
acetylcholine, which
can lead to sideeffects including
drowsiness, blurred
vision and poor
memory. People with
Alzheimer’s disease are known to lack acetylcholine.
For those taking the highest doses of anticholinergic drugs over
the study period, the relative risk of dementia was increased by a statistically significant 54% compared with no use. Risk of Alzheimer’s
alone was up by 63%. The researchers pointed out that anticholinergic effects in animals had been shown to increase levels of beta-amyloid protein in the brain, one of the hallmarks of Alzheimer’s. They
concluded: These findings have public health implications for the
education of older adults about potential safety risks because some
anticholinergics are available as over-the-counter products.
February 2015
CFO india
What’s on your mind?
J K Gupta likes to read the Economic Times &
Hindustan Times
January 15 at 06.20 · 10 comments · 16 people like this
J K Gupta likes to spend time with his family
Chief Financial Officer at
CMC- April 2002 till date
Chief Financial Officer &
Executive Vice preseident,
Access Group, Zee Network
- March 2000 to April 2002
Manager- Fianance &
Investor Relations, SAIL May 1985 to March 2000
January 25 at 17.20 · 20 comments · 30 people like this
J K Gupta wishes to coach kids for future challenges
January 29 at 18.45 · 31 comments · 25 people like this
J K Gupta spent time with Sahapedia, (a society which intends
to create digital information base relating to Indian heritage)
MBA - Faculty of Management
Studies, Delhi University
LLB - Delhi University
Associate’s Degree - Institute
of Cost and Work Accountants
of India
Bachelors in Commerce - Shri
Ram College, Delhi University
I Listen...
Bollywood Music
29 comments · 38 people like this
Recent activity
J K Gupta recently visited Europe with his family
Is listening to his favourite singer Arijit Singh
January 8 at 10.13 · Comments · 22 people like this
Term used to sell
a super-expensive
yet totally useless
idea to a client.
going to turbo
charge your pet
food campaign
by live-casting
happy marmots
dancing on the
moon on your
custom YouTube
channel! You
know the Internet
loves funny
Life is less stressful thanks to technology
Among New Year’s resolutions shared on Twitter, unplugging
digitally came right after losing weight and quitting smoking. People
are flocking to digital detoxes, screen-free bedrooms and apps that
nudge you off your phone. New York Times reported that such resolutions are in response to the notion that digital technology — like
round-the-clock email and friends’ envy-inducing Instagram photos
— is stressing us out and making us unhealthy. But a new study by
researcher at Pew Research Center and Rutgers University found the
opposite: Frequent internet and social media users do not have higher
stress levels than those who use them less often. And for women,
using certain digital tools decreases stress,” said Lee Rainie, director
of internet, science and technology research at Pew.
CFO india
February 2015
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CFO movements
Ebola: Depressing African Economy
It has almost completely
vanished from the news in the United
States, but Ebola persists in three
countries in Africa: Liberia, Guinea,
and Sierra Leone.
The World Health Organization’s
update puts the case toll at 21,171
in those three countries, with 8,371
deaths. The uncomfortable reality is
that the impact of Ebola reaches far
beyond those individual cases.
The World Bank predicts that the
disease will cripple the economies of
these countries in the future. Households across Liberia have undertaken
various mechanisms to cope with
Ebola’s socio-economic effects. Eighty
percent of those surveyed had either
sold assets, sold or slaughtered livestock, borrowed money, sent their
children to live elsewhere, spent savings or delayed investments since the
start of the Ebola crisis — all of which
can have negative long-term effects on
their welfare.
If the epidemic continues in the
three worst- affected countries and
spreads to neighbors, the two-year
regional financial impact could range
from a “low Ebola” estimate of $3.8 billion to a “high Ebola” estimate of $32.6
billion, says the report in Wired.
How the Smell of Rain
Bubbles From the Ground
A FAMILIAR scent fills the air after a dry stretch is broken by a summer rain.
There is even a word for this fresh, earthy smell: petrichor. The term was coined
in the 1960s when
scientists reported
that the smell came
from chemicals in the
surface that the rain
landed on, reports
NYT. Somehow the
rain brought out this
smell, but the exact
process wasn’t known
until two M.I.T. scientists captured the
process in high-speed
video. They were testing the absorption of
drops by various artificial surfaces, later including the natural soils. They found that at the right velocity
on the right kind of soil (sandy clay works, but sand doesn’t) a falling water drop
can trap tiny air bubbles under it. Those bubbles capture molecules in the soil. As
the water drop deforms, the bubbles scoot up through the drop and jet out into the
air, like champagne bubbles or spray from a crashing wave.
CFO india
February 2015
Vippy Spinpro gets
new CFO
Vippy Spinpro Ltd has informed
BSE that Ms. Sanju Patel has
been appointed as Company
Secretary (CS) & Chief Financial
Officer (CFO) of the Company.
Jarigold Textiles
appoints CFO
Jarigold Textiles announced
the appointment of Haresh M.
Bhavsar as Chief Financial Officer
(CFO) of the Company.
ETT Board appoints
new CFO
ETT announced has appointed
Puniti Sharma, Company
Secretary as Chief Financial
Officer (CFO) of the Company.
TRF has a change
in CFO
TRF Ltd has Mr. Mani Kumar Jha
as the new Chief Financial Officer
with designation of Chief, Finance
& Accounts of the Company.
Daftary CFO at
ABG Shipyard
ABG Shipyard Ltd has appointed
Mr. Hasmukh D. Daftary as the
new Chief Financial Officer (CFO)
of the Company.
New finance heat
at Oasis Securities
Oasis Securities Ltd has appointed
Mr. Narendra Thanvi as Chief
Financial Officer of the Company.
Ikab Securities has
new CFO
Ikab Securities & Investment
Ltd has informed BSE that
Mr. Abhishek Bagi has been
appointed as Chief Financial
Officer (CFO).
CFO india
February 2015
Cover Story
Bank overhaul
Indian banks, especially the
public sector banks, are
being asked to do more
than ever before. CFO India
maps out the changes that
are on the anvil.
Shalini S. Dagar
Illustration: Peterson PJ, Design: Vikas Sharma
A couple of years ago, when Ruchir Sharma, emerging markets head at Morgan Stanley Investment
Management came out with his book Breakout
Nations, one of the key themes in the book was the
desirability of churn among the top companies in a
country. The idea simply was that a high degree of
churn, in say, the benchmark stock index is reflective of a higher degree
of health, entrepreneurship and innovation. Sharma’s contention was
that while liberalisation did unleash a great churn in India, it was limited
to the decade of the 90s. The churn slowed down considerably in the
decade and a half that followed.
Now under a new political regime in India, there is a political mandate
for change that extends to the economic sphere as well. That need for
change and churn permeates the financial architecture too.
The signal for the banking industry which is at the fulcrum of economic change is clear when the Prime Minister begins the year with a
large gathering of bankers—mostly managers of public sector banks,
but also a clutch of high profile private bankers. Following the retreat,
Minister of State for Finance, Jayant Sinha was quoted in a business
paper as saying, “no government has done such fundamental banking
reforms in last 45 years.” He reiterated the same message at the launch
of The CFO Board a few days later. (See story on Pg 44)
It is not going to be business as usual any longer for the public sector banks which still command over 70 per cent of the market share in
India. The signs have been there for some time. And as former deputy
governor of the Reserve Bank of India, KC Chakrabarty says, “an overFebruary 2015
CFO india
Cover Story
Bank overhaul
haul is inevitable.” Even as India rises
up the scale on economic growth and is
poised to overtake China in such sweepstakes, Indian banks are not noticeable
in the big league of global banks, with
the State Bank of India, India’s largest
lender the only Indian bank in the top
100. (See table)
need for change
The triggers for comprehensive banking reforms are various. With business
and financial risk increasingly becoming more volatile, uncertain, complex
and ambiguous (VUCA), the global
challenges are accentuated in the case
of India where the largely public sec-
Change in the Air
“Government has
no vested interest.
And public sector
banks can derive
strength from
this fact.”
Narendra Modi
Prime Minister of India at the
two day bankers’ retreat in Pune
“Banks should take all
commercial decisions
in the best interests
of the organisation,
without any fear or
arun jaitley
Finance Minister of India
“We need a change
in mindset, where
the wilful defaulter
is not lionised as a
captain of industry, but
justly chastised as a
Raghuram rajan
Governor, Reserve Bank of India
CFO india
February 2015
tor nature of banking and an embedded oligarchy lead to a special kind of
problems. However, there were some
real, hard and immediate reasons for
PM Modi to spend time at the two-day
bankers’ retreat called Gyan Sangam.
The last few years of sluggish economic growth has manifested these
issues in stressed banking assets. For
a sense of perspective, sample these
figures nearly 79 per cent of total bank
provisions are held by public sector
banks. As of December 2013 Indian
banks collectively held loan provisions
for Rs 98,593 crore, with nearly a third
being held by the SBI group.
Even as policy glitches, judicial cancellation of telecom and coal licenses
caused some misery, these years have
also exposed the underlying systemic
issues in the sector. Issues of imprudent corporate leverage and inadequate
credit appraisal methods go hand in
hand to create large spills of red ink on
the balance sheet of banks.
The arrest of the Syndicate Bank head
in a bribe-for-credit scam was another
sign of the rot. The businessman-banker-politician nexus was at the root of the
arrest. The other story that is still playing out is that of Kingfisher Airlines
where banks have been trying to fix the
label of willful defaulter on the company and its directors. In the following
article, RBI Governor, Raghuram Rajan
in a speech outlines in detail the pernicious influence that deliberate defaults
by large borrowers have on the overall
climate for funding. (See story on Pg18)
However, much of the systemic grief
comes from the state-owned banks
which still constitute a bulk of the total
assets in Indian banking. Last summer,
the high level panel on bank reforms
chaired by former Axis Bank head, PJ
Nayak grimly said in its overview: “The
financial position of public sector banks
is fragile, partly masked by regulatory
forbearance. Capital is significantly
eroded with the proportion of stressed
assets rising rapidly.”
The weakening of the public sector
banks can cause much fiscal trouble.
Cover Story
Bank overhaul
haul is inevitable.” Even as India rises
up the scale on economic growth and is
poised to overtake China in such sweepstakes, Indian banks are not noticeable
in the big league of global banks, with
the State Bank of India, India’s largest
lender the only Indian bank in the top
100. (See table)
need for change
The triggers for comprehensive banking reforms are various. With business
and financial risk increasingly becoming more volatile, uncertain, complex
and ambiguous (VUCA), the global
challenges are accentuated in the case
of India where the largely public sec-
Change in the Air
“Government has
no vested interest.
And public sector
banks can derive
strength from
this fact.”
Narender Modi
Prime Minister of India at the
two day bankers’ retreat in Pune
“Banks should take all
commercial decisions
in the best interests
of the organisation,
without any fear or
arun jaitley
Finance Minister of India
“We need a change
in mindset, where
the wilful defaulter
is not lionised as a
captain of industry, but
justly chastised as a
Raghuram rajan
Governor, Reserve Bank of India
CFO india
February 2015
tor nature of banking and an embedded oligarchy lead to a special kind of
problems. However, there were some
real, hard and immediate reasons for
PM Modi to spend time at the two-day
bankers’ retreat called Gyan Sangam.
The last few years of sluggish economic growth has manifested these
issues in stressed banking assets. For
a sense of perspective, sample these
figures nearly 79 per cent of total bank
provisions are held by public sector
banks. As of December 2013 Indian
banks collectively held loan provisions
for Rs 98,593 crore, with nearly a third
being held by the SBI group.
Even as policy glitches, judicial cancellation of telecom and coal licenses
caused some misery, these years have
also exposed the underlying systemic
issues in the sector. Issues of imprudent corporate leverage and inadequate
credit appraisal methods go hand in
hand to create large spills of red ink on
the balance sheet of banks.
The arrest of the Syndicate Bank head
in a bribe-for-credit scam was another
sign of the rot. The businessman-banker-politician nexus was at the root of the
arrest. The other story that is still playing out is that of Kingfisher Airlines
where banks have been trying to fix the
label of willful defaulter on the company and its directors. In the following
article, RBI Governor, Raghuram Rajan
in a speech outlines in detail the pernicious influence that deliberate defaults
by large borrowers have on the overall
climate for funding. (See story on Pg18)
However, much of the systemic grief
comes from the state-owned banks
which still constitute a bulk of the total
assets in Indian banking. Last summer,
the high level panel on bank reforms
chaired by former Axis Bank head, PJ
Nayak grimly said in its overview: “The
financial position of public sector banks
is fragile, partly masked by regulatory
forbearance. Capital is significantly
eroded with the proportion of stressed
assets rising rapidly.”
The weakening of the public sector
banks can cause much fiscal trouble.
cover story
According to Fitch Ratings, Indian
banks need around $200 billion to bolster their capital adequacy. Such levels
of recapitalisation can be challenging
for any government, not just one trying
to claw back its path to fiscal prudence.
In any case as Udayan Bose, veteran
banker and former chairman of Lazard
India points, “investors would also like
to invest in cleaner banks.” A massive
clean-up and overhaul is therefore an
imperative to lighten the government’s
load. Private banks are no strangers to
evergreening of assets but then they are
exposed more harshly to market realities.
road to change
The Nayak committee alluded to
Schumpeterian ‘creative destruction’
which characterises any industry and
changes in market structure. While the
private sector banks in India have cornered an additional 9 per cent market
share between 2000 and 2013 largely
at the expense of public sector banks,
in the Indian banking system such creative destruction has been underpinned
by government ownership of a large
share of the industry.
And therefore as former central
banker Chakrabarty points out the
first cornerstone of reform will be an
ownership-agnostic regulatory regime.
“Regulation should be ownership-neutral. The guidelines for ‘fit and proper’
cannot be different for public sector
banks. There is no scope for regulatory
forbearance,” he adds. Public sector
banks are therefore going to be held
accountable to the same norms and
standards as are expected of the private sector and foreign banks. No wonder that the Prime Minister promised
that the bank managements would get
no phone calls from his government,
but that free hand comes with accountability. Simultaneously, the government
is also working on putting in place a
bankruptcy code for companies with
failed businesses.
Predictably, the second item on the
reform list will be appropriate governance standards and framework. The
Nayak Committee report was scathing when it said, “it is unclear that the
boards of most of these banks have the
required sense of purpose, in terms
of their focus on business strategy
and risk management, in being able
to provide oversight to steer the banks
through their present difficult position.” The committee highlighted the
inadequate focus that was placed in
many boards on long term strategy.
Again the public sector banks appear to
be more susceptible. CFO India got in
touch with the heads of some of these
banks. Most remained tight-lipped, but
as Bose says the quantum of desired
change is a huge ask.
Lack of appropriate talent and also
constraints around compensation
structures hamper the PSU banks. Yet
again the ball is in the government’s
court. Some bankers believe that talent is often a red herring. “All that one
requires is good governance,” says
one while adding that the appropriate
grooming can tide over the crisis fairly
quickly. “Our problems are quite simple. And they are not lack of knowledge
or skills, but lack of courage.”
However, the fast pace of change in
the operating environment for banks
especially on the technology side is
creating a sharp edge to this overhaul.
Mobile banking and virtual currencies
Need for reform
Indian banking system needs to change urgently if it has to keep up
with the aspirations of 8-9% economic growth.
India has the lowest number of banks per 100,000 people at 0.01,
while the median number in a WB survey is 0.4.
It is estimated that rural India had only 7 branches per 1,00,000
adults in 2011 in sharp contrast with most of the developed and
even BRICS economies having over 40 branches.
Even with 157 domestic banks operating in the country,
including 26 Public Sector Banks, 7 New Private Sector Banks,
13 Old Private Sector Banks, 43 Foreign Banks, 4 Local Area
Banks, 64 RRBs, just about 40% of the adults had formal bank
accounts in 2013.
In the global league table for 2014 based on the size of assets,
State Bank of India at 54th position is the only Indian bank in the
top 100 banks.
Rank of Indian banks in the global league
Name of Indian bank
Axis Bank
February 2015
CFO india
Cover Story
Bank overhaul
Gross NPA vs GDP in India
only mark some of the more
dramatic changes occurring in
this landscape. “Even the basics
of banking today are technology-led,” says Saurabh Tripathi,
Partner and director at Boston
Consulting Group who heads
the financial services practice.
PSU banks which are considered to be a generation behind
their more nimble competitors
are also hamstrung by the vigilance framework that they operate under such as Central Vigilance Commission or the Right
to Information requirements.
“How do you run a commercial
enterprise with such constraints? It is no
way to compete in the market,” he says.
And the third piece in the transformation will eventually involve the regulatory market. As Dr Chakrabarty points
out, “discretion-based regulation has to
end.” For public sector banks, in addition to the Reserve Bank of India as the
regulator, the government also acts as
something more than powerful shareholder. Acting on the Financial Ser16
CFO india
February 2015
The onus for radical
change lies with
the government.
A new regime sans
political baggage is
better equipped to
solve problems.
vices Legislative Reforms Commission
(FSLRC) will bring in accountability
into the regulatory process too.
short run
In the immediate future, the onus for
radical change lies with the government.
A new dispensation without any political baggage is better equipped to handle
many of these challenges, reckon most
observers of the banking industry.
So far the noises emanating
from the government quarters
are encouraging, yet as Tripathi
points out many of the reform
items that have been promised
are quite difficult. “They can
open up a Pandora’s box. The
crucial question is how high
up the government’s agenda is
banking reform?” he asks. The
unspoken question in the air is
whether the government can
trade this reform piece off for a
pragmatic and more achievable
reform measures.
Dr Chakrabarty agrees.
“Reform cannot happen piecemeal. It has to happen as a package
deal. More than the financial sector,
it is the real sector which needs more
reform,” he adds.
And the true test of the appetite for
reform will come from the way in
which some of the existing cases of
defaults are treated. So far it is only the
bankers who have been hauled up. The
other players of the game are still free.
Keep watching this space.
Cover Story
Saving Credit
Credit needs to be saved from creditors,
says Dr Raghuram Rajan, Governor,
Reserve Bank of India.
r. Kurien was a pioneer in the co-operative movement.
He not only was instrumental in bringing about the
White Revolution but he also built a variety of institutions, including Amul, Indian Institute of Rural Management (IRMA) and National Dairy Development Board
(NDDB). In creating the means by which farmers could
get remunerative, stable incomes, even while professionals managed
their interactions with the modern market economy, Dr. Kurien created a
uniquely Indian model that has brought millions out of poverty. A man of
strong convictions, determination, and integrity, he truly is a giant of postindependence India. Dr. Kurien showed people the way to remunerative
livelihoods, perhaps the best form of economic inclusion.
I have little expertise on the technologies and institutions he pioneered,
so I will not opine on them. Instead, I want to focus on another instrument for expanding human well-being, credit. At a time when demand for
bank credit is weak, even while we are likely to have enormous demand
for it if investment picks up, we have to ask if India’s system of credit is
healthy. Unfortunately, the answer is that it is not. We need fundamental
reforms starting with a change in mind set. A public lecture in the memory of a great Indian who did much to change our mind sets is a perfect
place to make the case.
CFO india
February 2015
cover story
The Debt Contract
The flow of credit relies on the sanctity of the debt contract.
A debt contract is one where a borrower, be it a small farmer
or the promoter of a large petrochemical plant, raises money
with the promise to repay interest and principal according to
a specified schedule. If the borrower cannot meet his promise, he is in default. In the standard debt contract through
the course of history and across the world, default means the
borrower has to make substantial sacrifices, else he would
have no incentive to repay. For instance, a defaulting banker
in Barcelona in mediaeval times was given time to repay his
debts, during which he was put on a diet of bread and water.
At the end of the period, if he could not pay he was beheaded.
Punishments became less harsh over time. If you defaulted
in Victorian England, you went to debtor’s prison. Today,
the borrower typically only forfeits the assets that have been
financed, and sometimes personal property too if he is not
protected by limited liability, unless he has acted fraudulently.
Why should the lender
not share in the losses to
the full extent? That is
because he is not a full
managing partner in the
enterprise. In return for
not sharing in the large
profits if the enterprise
does well, the lender is
absolved from sharing
the losses when it does
badly, to the extent possible. By agreeing to
protect the lender from
“downside” risk, the
borrower gets cheaper
financing, which allows
him to retain more of
the “upside” generated if
his enterprise is successful. Moreover, he can get
money from total strangers, who have no intimate knowledge of his
enterprise or his management capabilities, fully reassured by
the fact that they can seize the hard collateral that is available
if the borrower defaults. This is why banks offer to finance
your car or home loan today at just over 10 percent, just a
couple of percentage points over the policy rate.
to finance the enormous infrastructure needs and industrial
growth that this country aims to attain.
The reality is that too many large borrowers see the lender,
typically a bank, as holding not a senior debt claim that overrides all other claims when the borrower gets into trouble,
but a claim junior to his equity claim. In much of the globe,
when a large borrower defaults, he is contrite and desperate
to show that the lender should continue to trust him with
management of the enterprise. In India, too many large borrowers insist on their divine right to stay in control despite
their unwillingness to put in new money. The firm and its
many workers, as well as past bank loans, are the hostages
in this game of chicken -- the promoter threatens to run the
enterprise into the ground unless the government, banks,
and regulators make the concessions that are necessary to
keep it alive. And if the enterprise regains health, the promoter retains all the upside, forgetting the help he got from the
government or the banks – after all, banks should be happy
they got some of their
money back!
No wonder government ministers worry
about a country where
we have many sick
companies but no
“sick” promoters.
Let me emphasize
that I do not intend in
any way to cast aspersions on the majority
of Indian businesspeople who treat creditors fairly. I also don’t
want to argue against
risk taking in business. If business does
not take risks, we will
not get architectural
marvels like our new
international airports,
the “developed-forIndia” low cost business model in the telecom sector or our world class refineries. Risk taking inevitably means the possibility of default.
An economy where there is no default is an economy where
promoters and banks are taking too little risk. What I am
warning against is the uneven sharing of risk and returns
in enterprise, against all contractual norms established the
world over – where promoters have a class of “super” equity
which retains all the upside in good times and very little of the
downside in bad times, while creditors, typically public sector
banks, hold “junior” debt and get none of the fat returns in
good times while absorbing much of the losses in bad times.
In India, too many
large borrowers
insist on their
divine right to stay
in control despite
their unwillingness
to put in new
money. There are
hostages in this
game of chicken.
Violating the Spirit of Debt
The problem I want to focus on in this lecture is that the
sanctity of the debt contract has been continuously eroded
in India in recent years, not by the small borrower but by the
large borrower. And this has to change if we are to get banks
February 2015
CFO india
Cover Story
Saving Credit
Why does it happen?
Why do we have this state of affairs? The most obvious reason
is that the system protects the large borrower and his divine
right to stay in control.
This is not for want of laws. The Debts Recovery Tribunals
(DRTs) were set up under the Recovery of Debts Due to Banks
and Financial Institutions (RDDBFI) Act, 1993 to help banks
and financial institutions recover their dues speedily without
being subject to the lengthy procedures of usual civil courts.
The Securitisation and Reconstruction of Financial Assets
and Enforcement of Security Interests (SARFAESI) Act, 2002
went a step further by enabling banks and some financial
institutions to enforce their security interest and recover dues
even without approaching the DRTs. Yet the amount banks
recover from defaulted debt is both meagre and long delayed.
The amount recovered from cases decided in 2013-14 under
DRTs was Rs 30,590 crore while the outstanding value of debt
sought to be recovered was a huge Rs 2,36,600 crore. Thus
recovery was only 13 per cent of the amount at stake.
Worse, even though the law indicates that cases before the
DRT should be disposed off in 6 months, only about a fourth
of the cases pending at the beginning of the year are disposed
off during the year – suggesting a four year wait even if the
tribunals focus only on old cases. However, in 2013-14, the
number of new cases filed
during the year was about
one and a half times the
cases disposed off during
the year. Thus backlogs
and delays are growing,
not coming down.
Why is this happening?
The judgments of the
DRTs can be appealed to
Debt Recovery Appellate
Tribunals, and while there
are 33 of the former, there
are only five of the latter.
And even though section
18 of the RDDBFI Act is
intended to prevent higher constitutional courts
from intervening routinely in DRT and DRAT judgments, the honourable
Supreme Court recently
lamented that “it is a matter of serious concern that despite the pronouncements of
this Court, the High Courts continue to ignore the availability
of statutory remedies under the RDDBFI Act and SARFAESI
Act and exercise jurisdiction under Article 226 for passing
orders which have serious adverse impact on the right of
banks and other financial institutions to recover their dues.”
The consequences of the delays in obtaining judgements
because of repeated protracted appeals implies that when
recovery actually takes place, the enterprise has usually
been stripped clean of value. The present value of what the
bank can hope to recover is a pittance. This skews bargaining power towards the borrower who can command the finest legal brains to work for him in repeated appeals or the
borrower who has the influence to obtain stays from local
courts–typically the large borrower. Faced with this asymmetry of power, banks are tempted to cave in and take the unfair
deal the borrower offers. The bank’s debt becomes junior
debt and the promoter’s equity becomes super equity.
The promoter enjoys riskless capitalism – even in these
times of very slow growth, how many large promoters have
lost their homes or have had to curb their lifestyles despite
offering personal guarantees to lenders?
The public believes the large promoter makes merry
because of sweet deals between him and the banker. While
these views have gained currency because of recent revelations of possible corruption in banks, my sense is that
Occam’s Razor suggests a more relevant explanation – the system renders the banker helpless vis-a-vis the large and influential promoter. While we should not slow our efforts to bring
better governance and more transparency to banking, we also
need to focus on reforming the system.
Who pays for this one
way bet large promoters
enjoy? Clearly, the hard
working savers and taxpayers of this country!
As just one measure, the
total write-offs of loans
made by the commercial banks in the last five
years is 1,61,018 crore,
which is 1.27 per cent of
GDP. Of course, some
of this amount will be
recovered, but given the
size of stressed assets in
the system, there will be
more write-offs to come.
To put these amounts in
perspective – thousands
of crore often become
meaningless to the lay
person –1.27 per cent of GDP would have allowed 1.5 million
of the poorest children to get a full university degree from
the top private universities in the country, all expenses paid.
The promoter enjoys
riskless capitalism–
even in these times
of very slow growth,
how many have had
to curb their lifestyle
despite offering
personal guarantees
to lenders?
CFO india
February 2015
The Consequences
Let me emphasize again that I am not worried as much
cover story
about losses stemming from business
risk as I am about the sharing of those
losses –because, ultimately, one consequence of skewed and unfair sharing is
to make credit costlier and less available.
The promoter who misuses the system
ensures that banks then charge a premium for business loans. The average
interest rate on loans to the power sector today is 13.7 per cent even while the
policy rate is 8 per cent. The difference,
also known as the credit risk premium
of 5.7 per cent is largely compensation
banks demand for the risk of default and
non-payment. Since the unscrupulous
promoter hides among the scrupulous
ones, every businessperson is tainted by
the bad eggs in the basket. Even comparing the rate on the power sector loan
with the average rate available on the
home loan of 10.7 per cent, it is obvious
that even good power sector firms are
paying much more than the average
household because of bank worries
about whether they will recover loans.
Reforms that lower this 300 basis point
risk premium of power sector loans visa-vis home loans would have large beneficial effects on the cost of finance,
perhaps as much or more than any monetary policy accommodation.
A second consequence is that the law
becomes more draconian in an attempt
to force payment. The SARFAESI Act of
2002 is, by the standards of most countries, very pro-creditor as it is written.
This was probably an attempt by legislators to reduce the burden on DRTs and
force promoters to pay. But its full force
is felt by the small entrepreneur who
Raghuram Rajan
Governor, Reserve Bank of India
does not have the wherewithal to hire
expensive lawyers or move the courts,
even while the influential promoter once
again escapes its rigour. The small entrepreneur’s assets are
then? Indeed, Viral Acharya of New York University (NYU)
repossessed quickly and sold, extinguishing many a promisand Krishnamurthi Subramanian of Indian School of Busiing business that could do with a little support from bankers.
ness (ISB) show in a compelling study that innovation is
A draconian law does perhaps as much damage as a weak
lower in countries with much stricter creditor rights. Or
law, not just because it results in a loss of value on default
put differently, the solution to our current problems is not
but also because it diminishes the incentive to take risk. For
to make the laws even more draconian but to see how we
(example), think of a mediaeval businessman who knows
can get more equitable and efficiency-enhancing sharing of
he will be imprisoned or even beheaded if he defaults. What
losses on default.
incentive will he have to engage in innovative but risky busiA final consequence of the inequitable sharing of losses in
ness? Is it any wonder that business was very conservative
distress is that it brings the whole free enterprise system into
“Even good power sector firms
are paying much more than the
average household because of
bank worries.”
February 2015
CFO india
Cover Story
Saving Credit
disrepute. When some businessmen enjoy a privileged existence, risking other people’s money but never their own, the
public and their representatives get angry. I have met numerous parliamentarians who are outraged at the current state
of affairs. If the resolution of these issues is taken out of the
realm of the commercial into the realm of the political, it will
set back industrial growth. Reforms therefore assume urgency. What we need is a more balanced system, one that forces
the large borrower to share more pain, while being a little
more friendly to the small borrower. The system should shut
down businesses that have no hope of creating value, while
reviving and preserving those that can add value. And the
system should preserve the priority of contracts, giving creditors a greater share and greater control when the enterprise
is unable to pay, while requiring promoters to give up more.
A better balance
How do we achieve this better balance? Let us start with
better capital structures. The reason so many projects are in
trouble today is because they were structured up front with
too little equity, sometimes borrowed by the promoter from
elsewhere. And some promoters find ways to take out the
equity as soon as the project gets going, so there really is no
cushion when bad times hit.
Lenders should insist on more real equity up front,
and monitor the project closely to ensure it stays in. Promoters should not try and finance mega projects with tiny
slivers of equity. We also need to encourage more institutional investors, who have
the wherewithal to monitor
promoters, to bring equity
capital into projects.
Banks need to react more
quickly and in a concerted
way to borrower distress.
The longer the delay in
dealing with the borrower’s financial distress, the
greater the loss in enterprise value. Some banks are
more agile (and have better
lawyers), so the promoter
continues servicing them
while defaulting on other
banks. In the absence of an
efficient bankruptcy process
that brings lenders together,
the RBI has mandated the
formation of a Joint Lending
Forum (JLF) of lenders when the first signs of distress are
perceived. The JLF is required to find a way to deal with the
distressed enterprise quickly, with options ranging from
liquidation to restructuring. In this way, we hope to coor-
dinate lenders and prevent the borrower from playing one
off against the other.
The government’s plan to expand the number of DRTs and
DRATs is timely, and will be most effective if also accompanied by an expansion in facilities, trained personnel, and
electronic filing and tracking of cases, as suggested by the
Supreme Court. Also
Some monetary incentives to tribunals for bringing down
the average duration of cases, without compromising on
due process, could be contemplated.
Some limit on the number of stays each party can ask for
could also be thought of.
Appeals to the DRAT should not be a matter of course.
Indeed, DRATs should require borrower appellants to
deposit a portion of the money ordered to be paid by the
DRT as laid down in the law as a matter of course, rather
than routinely waiving such deposits as is reported to be
current practice.
It is worth examining if appellants should be made to
pay the real costs of delay out of their own pockets if unsuccessful, where the costs include the interest costs of postponed payments.
As suggested by the Supreme Court, Constitutional
Courts should respect the spirit of the laws and entertain
fewer appeals. It is hard to see what points of law or judicial administration are raised by the standard commercial
case and routine judicial intervention favours the recalcitrant borrower at the expense of the lender. Challenging the
orders of DRT and DRAT
before courts should be
made costlier for the appellants. Courts should require
them to deposit the undisputed portion of the loan
before admitting the case
so that routine frivolous
appeals diminish.
The system also needs
professional turn-around
agents who can step in the
place of promoters. Asset
Reconstruction Companies
(ARCs) were meant to do
this, but they need more
capital and better management capabilities. Also,
there is a requirement that
they hand the enterprise
back to the original promoter once they have generated enough value to repay the original debts. Such a requirement is misconceived and needs
to be repealed, else ARCs have little incentive to spend
effort and money to turn around firms. They will simply
The solution is to
see how we can
get more equitable
and efficiencyenhancing
sharing of losses
on default.’
CFO india
February 2015
cover story
be liquidators, as they
have largely proven to be
so far. I should mention
that the RBI is open to
more firms applying for
licenses as ARCs. The
government is working
on a new bankruptcy
law, which is very much
needed. Properly structured, this will help bring
clarity, predictability
and fairness to the
restructuring process.
align them with the project’s cash flows, and for
the ability to take equity
so as to get some upside
in distressed projects.
These are more legitimate requests as they
imply a desire to deal
more effectively with distress. The regulator has
been reluctant to afford
banks this flexibility in
the past because it has
been misused by bank
management. Nevertheless, recognizing that it
cannot micromanage the
resolution of distress, the
RBI is exploring ways to
allow banks more flexibility in restructuring.
This is a risk we are prepared to take if it allows more projects to be set on the track to recovery.
In sum, the RBI opposes forbearance which simply pushes
problems into the future, while it will allow more flexibility
so that problem loans can be dealt with effectively today. Let
us also be clear that we will be watchful for misuse of flexibility and will deal severely with it if it occurs.
forbearance, which
is a euphemism
for regulators
collaborating with
banks to hide
problems and push
them into the future,
is a bad idea.
Finally, let me end on a
current concern that pertains to the RBI’s regulation that is not unrelated to the issues discussed in this
lecture. Today, a large number of industries are getting
together with banks to clamour for regulatory forbearance.
They want the RBI to be “realistic” and postpone any recognition of bad loans.
This is short-sighted, especially on the part of the banks.
Today, the market does not distinguish much between nonperforming loans and restructured loans, preferring to call
them both stressed loans and discounting bank value accordingly. Mutilating Shakespeare, an NPA by any other name
smells as bad! Indeed, because forbearance makes bank balance sheets opaque, they may smell worse to analysts and
investors. The fundamental lesson of every situation of banking stress in recent years across the world is to recognize
and flag the problem loans quickly and deal with them. So
regulatory forbearance, which is a euphemism for regulators
collaborating with banks to hide problems and push them
into the future, is a bad idea.
Moreover, forbearance allows banks to postpone provisioning for bad loans. So when eventually the hidden bad
loans cannot be disguised any more, the hit to the bank’s
income and balance sheet is larger and more unexpected.
This could precipitate investor anxiety about the state of the
bank, and in the case of public sector banks, leave a bigger
hole for the government to fill. These are yet more reasons to
end forbearance. Or put differently, forbearance is ostrichlike behaviour, hoping the problem will go away. It is not
realism but naiveté, for the lesson from across the world is
that the problems only get worse as one buries one’s head
in the sand. At the same time, the banks have also been asking the
regulator for greater flexibility to restructure loans so as to
Let me conclude. Perhaps the reason we have been so willing to protect the borrower against the creditor is that the
hated moneylender looms large in our collective psyche. But
the large borrower today is not a helpless illiterate peasant
and the lender today is typically not the sahukar but the public sector bank – in other words, we are the lender. When
the large promoter defaults wilfully or does not cooperate
in repayment to the public sector bank, he robs each one of
us taxpayers, even while making it costlier to fund the new
investment our economy needs.
The solution is not more draconian laws, which the large
borrower may well circumvent and which may entrap the
small borrower, but a more timely and fair application of current laws. We also need new institutions such as bankruptcy
courts and turn-around agents. Finally, we need a change in
mind set, where the wilful or non-cooperative defaulter is
not lionized as a captain of industry, but justly chastised as
a freeloader on the hardworking people of this country. I am
sure that is a change in mind set that Dr. Verghese Kurien
would approve of. Thank you!
— This is the unabridged version of a lecture that was delivered by
Dr Rajan at IRMA, Anand on November 25, 2014.
February 2015
CFO india
Your monthly dose of policy updates. All
that you need to know about the policy and
regulatory environment.
US promises $2bn
for clean tech
Smart cities
on a roll
Indian Prime Minister Narendra Modi and US President Barack Obama
pledged to collaborate in the area of clean energy and combat climate change. US
TRADE and Development Agency (USTDA) pledged $2 billion loan to renewable
energy projects. In another association, US Overseas Private Investment Corporation (USOPIC) will lend $1 billion to clean energy projects in India.
While Modi and Obama made headway with their announcements on tackling
climate change there is no indication as yet that India will change its basic stand
in international negotiations of developed countries as biggest polluters paying
most. The Indo-US partnership is based on ten specific initiatives, which include
broadening the areas for undertaking research in clean energy; addressing urban
air quality; expanding policy dialogues and technical work on clean energy and
low greenhouse gas emissions technologies; undertaking demonstration and pilot
clean energy projects; and developing cooling solutions to replace hydrocloroflurocarbons (HFCs), which contribute to global warming.
Experts believe that India needs $200 billion to meet its target. US support is
expected to lend support to this ambitious goal. It is expected to also hasten the
foreign and domestic fund flow for renewable energy projects in India.
CFO india
February 2015
EVEN AS the government is yet to
roll out the smart cities scheme, the
United States Trade and Development
Agency (USTDA) signed Memorandums of Understandings (MoUs) with
Uttar Pradesh, Rajasthan and Andhra
Pradesh for cooperation to support
the development of three smart cities. The cities are Allahabad, Ajmer
and Visakhapatnam.
Under the MoUs, the USTDA will
contribute funds for feasibility studies
and pilot projects, study tours, workshops or trainings and other projects
that would be determined mutually. It
will enable US industry bodies to
mobilise private sector expertise and
resources to address important aviation and energy related infrastructure
connected to developing smart cities.
On their part, the respective state
governments will provide resources in
support, coordination and facilitation
of the development of smart cities,
including technical information and
data related to them planning, staff,
logistical and travel support. Earlier
this year, in the first phase of Smart
City programme, Japan extended an
investment of $4.5bn to Dholera,
Gujarat that will cover 920 Km of the
industrial corridor.
policy capsule
Unshackling business
India’s FY17 growth
to pip China’s: IMF
ADDRESSING the US-India Business Summit, President Barack Obama and
Prime Minister Modi in the presence of over 100 CEO, PM Narendra Modi made
a pitch for more bilateral trade that the two leaders said was currently way under
potential. “You will find environment that is open and welcoming,” said Modi. He
highlighted some of the reforms, including ordinances, that have made it easier to
do business in India. Obama acknowledged that there is a lot of ground to cover.
“We are moving in the right direction. There is still untapped potential that we have
not realised,” he said. “We want to see more trade and more investment between
the two countries that will benefit our people,”Obama reiterated. Modi also talked
about steps that his government has taken since assuming power in May 2014.
These include relaxed foreign investment caps in various sectors such as defence,
insurance and pharmaceuticals. “Our aim is to be in top 50 nations in ease of doing
business,” he said. That’s an ambitious target given that currently India’s ranking
is a lowly 142nd out of 189 countries in the World Bank’s ‘Ease of Business’ report.
Bilateral trade between the two countries stood at $61.64 billion in 2013-14.
FCI’s major restructuring is underway
THE HIGH LEVEL panel headed by
Shanta Kumar submitted the report on
Food Corp of India (FCI), which said the
government’s food subsidy bill can come
down by over Rs 30,000 crore a year
by reducing coverage of beneficiaries
to 40 per cent under the food law and
outsourcing major work of FCI to states
governments and private players. The
panel suggested direct cash transfer of Rs
3,000 per person a year as food subsidy
and Rs 7,000 per hectare as farm input
subsidy besides revisit of minimum support price (MSP) policy with more focus
on pulses and oilseeds. It suggested lowering the coverage of beneficiaries under
the food law to 40 per cent, from 67
per cent, to cover more BPL families and
increase the quantity of foodgrains supply to 7 kg per person from the existing
5/kg. The panel said that the government
should defer implementation of food law
in states that have not done end-to end
computerisation, have not put the list of
beneficiaries online and not set up vigilance committee to check pilferage from
PDS. The Food law is expected to up the
food bill to Rs 1.30 lakh crore.
India would beat China to
become the world’s fastest-growing major economy in 2016-17,
the International Monetary Fund
(IMF) forecasted, as it trimmed
growth projections for most
major economies, except the US.
India’s gross domestic product
(GDP) is expected to expand
6.3% in 2015-16 and 6.5% in
2016-17, while China, having
experienced its worst economic
slowdown in 24 years last year,
could witness its growth sliding
further to 6.8% in 2015 and
6.3% in 2016 . In India, the
growth forecast is unchanged, as
weaker external demand is offset
to the terms of lower oil prices.
11.5 CRORE
India has become fully banked, a
feat commended by the Guinness
Book of World Records for being
accomplished in the short span —
about five months. It paves the way
for the government’s ambitious
plan to transfer annual subsidy of
around Rs 51,029 crore directly to
bank accounts of 15.45 crore beneficiaries in the next year, plugging
system leakages. The government
has already rolled out direct transfer
of benefits for various programmes.
This includes the Mahatma Gandhi
National Rural Employment Guarantee Scheme (MGNREGS) in 300
districts that’s expected to cover
4.3 crore beneficiaries with a fund
flow of Rs 15,000 crore annually
besides transfers under pension and
scholarship schemes.
February 2015
CFO india
CFO, HPCL-Mittal Energy
Harak Banthia, CFO,
HPCL-Mittal Energy
loves good speed both
in cars and companies.
When a venture
achieves steady state,
he believes it is time
for him to look for
new opportunities and
Vartika Rawat
CFO india
February 2015
There are many ways to describe Harak
Banthia—number cruncher, turnaround man or
a fast car aficionado. And he has anecdotes to bolster any of those descriptions. One of his favorite
anecdotes of his eventful professional life is around
his experiences in Romania when the economy
of the country was in a shambles. A primitive
barter economy existed in the erstwhile
communist country.
The privatisation of the country’s largest steelmaker and biggest loss-making plant Sidex was
announced in July 2001. Rechristened Ispat Sidex,
the company saw a new management. Harak Banthia came in as the Chief Financial Officer (CFO).
Recounting those heady days, Banthia recalls
that he took a decision of dealing only in cash
on the first day itself. “We will pay cash and we
will take cash,” was the firm order. He explains,
“We were dealing with a substantial barter economy that most of us had read only in books. Nearly
95 per cent of the company’s transactions were
in barter format and just five per cent in cash
usually to pay salaries or to deal with other
European companies.”
There was a spate of other harsh decisions which
were taken including cancellation of contracts and
dealing with threats of legal actions. The company
negotiated with past debtors with firm decisions.
That and a host of other actions took the company
Jitender singh
On the fast lane
Lovelock &
Lewes (now
Experience with
Ispat Sidex SA
Turning around a
loss of $1 million
to $ 2 million
profit per day
A lesser
known fact
Plays the keyboard
To set up own
February 2015
CFO india
back to health. Within a span of four years, the
company recovered from making USD $1 million
loss per day to a profit of USD $2 million per day.
The Romania experience was valuable in the
over 28 years of experience that Banthia has garnered over his professional life. “My work experience in various countries has helped me understand the differences in legislation, productivity
levels, culture, mind-sets and work ethics,” he says.
Banthia’s association with the LN Mittal group
goes back to 1995 where he has spent the last 16
years in mergers, acquisitions, finance, commercial and management of various companies.
Three years ago, while working in London with
Mittal Investment UK, he decided to move back
to India drawn by his home country’s nostalgia.
The Mittal Group rather than letting him go just
changed his assignment to the new start-up refinery in India. That made a full circle back to India.
Banthia’s journey in finance started with a gentle
nudge from his father who was a lawyer and was
involved on the finance side of the family business
of tea gardens in Jalpaiguri and Assam.
“I was a number cruncher, good at mathematics
and often the teacher’s favorite. While my father
suggested the stream, I too found my interest here.
And I love it,” he adds. He counts Lajpath Hindi
High School and St. Xaviers, Kolkata as the institutions that helped set the foundation for his career.
Banthia found his first job at Lovelock
and Lewes, an audit firm where he had a multifunctional role. “I had interest in every area so I
actively participated in whatever happened at the
firm. Be it internal audit, dealing with taxes or any
special project, I tried to play a key role in every
project,” he passionately recollects those days. His
experience was so good that he proudly points
out that, “in a period of seven years I was
promoted five times.”
For a man who has spent most of his career life
outside of India he still likes returning his home
where his whole family lives together. “Work-life
balance is difficult to attain and maintain. Krishna,
my wife is the reason that I am able to do justice to
my work,” he says.
Whenever a company needs a turnaround,
Harak Banthia seems to be an appropriate choice.
Banthia worked in the energy space earlier as the
CFO of ONGC Mittal Energy Services. He was also
the Managing Director at Escada a luxury fashion
and accessories brand, from 2009 to 2013. He
brings this diverse experience and more to HMEL,
a PPP set up founded in 2000.
CFO india
February 2015
Leadership in the Era of
Economic Uncertainity
3 Idiots and Sholay
Role Model
Creates and adopt best
things from everyone
and ignore bad
‘external risks do worry banthia on
account of the high debt levels
Driving big cars like
the latest model of the
Jaguar and eating in
good ambience
As a start-up HMEL has done quite well in
a short duration. On its way to clocking $8 billion
in annual turnover and soon making profits at
the cash and the bottomline level, this joint
venture company has been another good experience for Banthia.
“The company has stabilised operationally. We
are close to positive profits and we will consider a
public listing in the next couple of years.”
There are external risks that worry Banthia such
as currency, commodity and interest rate risks.
Issues such as customs duties and pricing of products again are external risks that can affect operations in a major way.
HPCL-Mittal Energy is planning a 25 per
cent capacity expansion. Each drop in
global crude oil prices by $10 adds Rs 450
crore to the bottomline of the company,
which expects to go public soon.
And the falling global crude oil prices
help matters in the long run. A drop of
$10 in prices adds $1 to the gross refining
margins. And each $1 increase in GRMs
is straightaway a gain of Rs 450 crore to
the bottomline. I am optimistic about the
cash flows in the future,” he adds.
The company already announced a 25
per cent capacity expansion to 225,000
barrels per day last year and is expected
to go public in the next couple of years.
“It is my ambition to make this company the best in the world in all aspects.
It is one of the most complex refin-
eries in India. We have done many
new things here whether they are in
terms of accounting, technology or treasury,” says the proud CFO. Yet the restless spirit of surfaces often. “Once the
company starts doing well, my role there
is done,” he says.
Banthia dreams of setting up his own
venture, most probably on the trading
side as that is quick to set up. “It is a
dream. I would want to do it in my lifetime, but let us see.”
For now there is certainly enough to
do though at the present company. As a
parting shot, his word of advice for those
starting out in the finance profession is
to keep working hard and continuing to
retain one’s values.
When the road is not smooth and you
hit roadblocks then it helps to meet and
explain your opinions to the relevant people, he believes.
“The important thing is not to lose your
cool under pressure. In any case, I generally outperform under pressure,” he says
with the elan of someone who has taken
the fast lane more than once. We believe
that Mr Banthia.
February 2015
CFO india
in practice
Why Indian firms
prefer to go abroad
to fix legal woes?
Speedy dispute resolution and fewer legal hassles prompt Indian
firms to opt for arbitration proceedings overseas.
Sudha Munireddy & Madhavi Ravishankar
ith India carving its
niche as an emerging start-up capital, the country is witnessing a steady
growth in the number of arbitration
cases. Even as the top arbitration institutes around the world have witnessed a
huge surge in the number of registered
cases year on year, the Indian Council
of Arbitration handles a little over 400
cases a year. Many Indian companies
prefer to head to international centres
for resolving arbitration issues in a fair
and amicable manner. While some cite
reasons of proximity, others are looking
for a fair judgment in a speedy and cost
effective manner.
Hence, it would seem that the arbitration system in India is falling short.
Recently, Sasken had to take the help of
the American Arbitration Association
(AAA) to resolve a dispute. The experience threw light on the AAA’s inclusion of experts in the subject matter,
admission, confidentiality and an inexpensive as well as expedient process.
CFO india
February 2015
As a result of Sasken’s experience,
this paper examines the imperfections
in the Indian arbitration system and
makes recommendations on improving the structure based on international
models followed around the world.
Some of the best practices and rules
followed by institutes around the world
which lend them an edge as compared
to their Indian counterparts have also
been highlighted in this paper.
An Expedient Dispute
In December 2012, Sasken approached
the American Arbitration Association’s
(AAA) International Centre for Dispute
Resolution over non-payment of royalties by a semiconductor manufacturer
for a software/IP licensed by Sasken as
part of the joint development project
undertaken by both the parties.
The semiconductor manufacturer
failed to meet the obligations to Sasken.
This resulted in arbitration which was
filed by Sasken before the AAA. During
June 2014, the AAA announced its decision to the effect that the contract was
valid. It also required the other party
to pay past royalties and to further continue to pay royalties for the software
provided by Sasken.
While Sasken’s experience with AAA
has been positive due to certain reasons
which set the AAA apart from all other
institutions, a close examination of the
arbitration system in India throws light
on the scopes for improvement within
the system.
Arbitration, as a mechanism of dispute resolution, has a long history in
India. It was formally recognized in
India under the Indian Arbitration
Act, 1940.
However, the most significant phase
of arbitration was heralded with the
enactment of the Arbitration and Conciliation Act, 1996 which was in an
effort to modernize the outdated 1940
in practice
Arbitration in
India has been
vitiated due to
the ambiguous
of the term
‘public policy’
which allows
courts to set
aside awards.
Act. The 1996 Act is a comprehensive
statute modeled on the lines of the
UNCITRAL (United Nations Commission on International Trade Law) Model
Law. Its objective was to encourage arbitration as a cost-effective and speedy
mechanism for the settlement of commercial disputes. The Act covers both
domestic arbitration and international
commercial arbitration.
Unfortunately, the 1996 Act itself has
not been as effective as originally envisioned. The courts have faced some difficulties in the application and interpretation of the Act and while doing so they
have identified some lacunae in the Act
which defeat the very object of the law.
The Act has so far been subjected
to review by the Law Commission of
India and there have been many recommendations for amending the Act.
Although these recommendations were
initially accepted, they were later withdrawn in order to bring about a broader
and more effective change. Attempts
to bring about this change have been
futile so far. That said, it must be noted
that arbitration in India is still in an
evolutionary phase. One of the principal objectives of the Act was to achieve
the goals of inexpensive and expedient
resolution of disputes, but the ground
realities indicate that these goals are far
from being achieved.
There is little doubt that the arbitration system in India is flawed and can
be improved upon. The quality of arbitration has not sufficiently developed
to serve as a quick and cost-effective
mechanism for resolution of commercial disputes. We believe, some of the
reasons for this are:
1. Retired judges as arbitrators: In
India, the law requires the appointments of arbitrators to be carried out
by the Chief Justices or designated
judges and such appointments tend
to be made in favor of retired judges.
Unfortunately, the tendency among
retired judges is to take up arbitration
as a vocation unlike the international
practice where such services are rendered by professional arbitrators.
2. Judicial intervention in arbitration: The 1996 Act was framed with
the intent to give the parties complete
autonomy, maximum judicial support
along with minimum judicial intervention. However, due to inherent limitations in the 1996 Act and its unfavorable interpretation, this intent has been
largely diluted.
Despite promises of non-interference
by judiciary, there have been many
instances where the judiciary has
indeed interfered with the arbitration
process; either due to the empowerment of Chief Justices under the Act to
appoint arbitrators or due to the wide
and ambiguous interpretation of the
term ‘public policy’, which empowers
the courts to set aside the awards on
grounds of public policy.
February 2015
CFO india
in practice
3. Independence and impartiality in
arbitration: Questions relating to lack
of impartiality of arbitrators and procedural defects in the conduct of arbitration proceedings, which are grounds for
setting aside of awards, are the subjectmatter of frequent litigation. This has a
cascading effect and adds to the caseload
of an already overburdened judiciary.
Considering the loopholes in the
Indian arbitration enactment, it is evident that there is an urgent need for
change in the law. In this regard, the
Indian legislature and judiciary have
a vital choice to make; either respect
a party’s independence and autonomy and accept the finality of arbitral
awards as intended by the objects of
the 1996 Act or to continue allowing
judicial intervention on arbitration and
revert to the spirit of the 1940 Act. This
choice is crucial as it will lay down the
roadmap for the course of Indian arbitration for the coming years.
While arbitration disputes can be carried out in either ad hoc or institutional
mode, the latter is yet to gain preference
in India. Ad hoc arbitration is a mode
of arbitration where the parties themselves decide all aspects of the arbitration from the number of arbitrators to
the procedure and applicable rules for
conducting the arbitration.
Institutional arbitration, on the other
hand, is a mode of arbitration where the
arbitration procedure is conducted by an
arbitral institution in accordance with
the rules of the institution. Institutional
arbitration empowers the institution to
appoint the arbitrators and to have its
own panel of professionally qualified
and experienced arbitrators associated
with the institution.
In ad hoc arbitrations, the arbitrators
often lack the necessary knowledge
and expertise and proceedings are
usually overseen by persons who are
not lawyers. This often results in
misinformed decisions being taken
especially in resolution of international
commercial arbitration disputes. On
occasions where ad hoc arbitrations
are impeded by a lack of cooperation
CFO india
February 2015
arbitration in India
legislature &
judiciary have a
vital choice to
the finality of
arbitral awards
or revert to
1940 law.”
Sudha Munireddy
Head, Legal, Sasken
bet ween t he par t ies or t here is
delay on the part of the tribunal in
conducting the arbitration or passing
the award, a party may opt for seeking
court intervention, which defeats the
purpose of electing alternative forums
for resolving disputes.
Further, the resulting litigation costs
arising out of seeking judicial intervention for resolving the disputes negates
the cost advantages of an ad hoc arbitration. In complex cases the arbitral
tribunal may also choose to appoint a
secretary to deal with the administrative work load. The additional cost of the
secretary’s fees adds to the cost burden
of the arbitration.
Arbitrations which are conducted in
India are mostly ad hoc. The concept
of institutional arbitration, although
gradually becoming popular in India,
has yet to make a difference.
Some of the arbitral institutions in
India include the International Centre for Alternate Dispute Resolution
(ICADR), the Indian Council of Arbitration (ICA), the Federation of Indian
Chamber of Commerce and Industry
(FICCI) and Chambers of Commerce.
The advantage of institutional arbitration over ad hoc arbitration in India is
well known and seen as being speedy
and cost effective.
Practices such procedural rules established by the institutions, regulated
fees, availability of competent resources,
panel of arbitrators and experienced
committees to scrutinise the awards
prior to their finalisation are some of the
examples that provide institutional arbitration an edge over ad hoc arbitration.
Although institutional arbitration has
many advantages over ad hoc mechanisms more than 90 per cent of arbitration proceedings are conducted through
the ad hoc process in India. This is due
to various apprehensions regarding the
smooth functioning of institutional
arbitration with minimum judicial
intervention in the arbitration process.
Although, prominent arbitral institutions such as the International Court
for Dispute Resolution(ICDR) and London Court of International Arbitration
(LCIA) have their establishments in
India, the country is yet to accept these
institutions for arbitrations.
Comparision of Indian
& foreign institutions
The growing trend in arbitration is to
opt for settlement of disputes by institutional arbitration, provided such
institutions maintain high standards of
quality and professionalism in conducting the arbitration proceedings. The
in practice
factors for determining these standards
include the availability of professional
arbitrators, infrastructure facilities,
time and cost saving procedures and
uniformity of rules, regulations and
laws. Although there are many institutions in India which promise speedy
and cost effective resolution of disputes,
they are plagued by multiple loopholes
which make them fall short of being at
par with international arbitral institutions. A comparative study of Indian
arbitral institutions with international
institutions reveals the following:
Though they may be more cost effective than their counterparts abroad,
institutional arbitrations in India are
found to be less professional and more
time consuming.
Although Indian institutions such as
Indian Council of Arbitration charge
extremely low administrative costs and
arbitrator’s fees, it works as a disadvantage. Many established and reputed
arbitrators stay away from participating in the arbitrations conducted by the
Council, because of the low levels of
remuneration paid to them.
Indian arbitration institutions lack
efficiency and often fail to meet original deadlines which are extended with
alarming frequency.
In India, retired judges continue to
find favor as arbitrators leading to a
lot of criticism. On the contrary, major
arbitral institutions abroad, such as the
London Court of International Arbitration (LCIA), American Arbitration
Association (AAA), Singapore International Arbitration Centre (SIAC), and
International Chamber of Commerce
(ICC) have a panel of arbitrators from
different fields who may be selected by
the disputing parties.
Generally, lawyers form the largest
group of these arbitrators, academicians are favored next, followed by
other professionals such as accountants, engineers etc.
Despite presence of domestic arbitral
institutions, the general shift seems to
be towards international institutions
for resolving commercial disputes.
Globally, international arbitration
institutions have registered massive
growth over the recent years. Statistics
indicate that the International Chamber of Commerce (ICC) in Paris has
recorded a 51 per cent growth in the
number of cases from 2000 to 2009
and International Centre for Dispute
Resolution (ICDR) in the USA a 64 per
cent growth for the same period.
Apart from this, the Singapore International Arbitration Centre (SIAC)
witnessed an astounding 208 per cent
growth in cases filed with it for the same
period, many of them also coming from
India, given the advantage of proximity.
Advantages of AAA over
Indian institutional
Sasken’s experience in the recent
past with the American Arbitration
Association (AAA) has brought to the
forefront a few advantages that can be
incorporated in the Indian arbitration
system to help companies resolve their
issues at home.
The AAA is a renowned international
institution with a good track record of
Therefore, based on the nature of the
dispute and the expertise required, the
parties in a dispute can choose their
arbitrators and can be rest assured
that the dispute will be resolved under
expert guidance.
In India, the Arbitration and Conciliation Act, 1996 provides for appointment
of arbitrators by the parties. However,
Indian businesses do not appoint arbitrators with the intent of having professional arbitrators to decide the matter
and still rely on retired judges to arbitrate their disputes.
Further, the AAA respects the freedom of choice of the parties by allowing
them to choose an arbitrator who is not
from the pool of arbitrators associated
with AAA. In contrast, Indian institutions such as the ICA do not cater to
arbitrations where the arbitrator is not
associated with the institution.
2. Expedient and inexpensive: The
AAA arbitration process is smooth
and expedient in comparison to Indian
Arbitration. The AAA rules have strict
timelines for rendering of awards and
the same cannot be extended based on
the whims of the arbitrators. This is
in contrast with the practice in Indian
Though it may be more costeffective than their global
counterparts, institutional
arbitrations in India are found
to be less professional and more
time consuming.
successful dispute resolution through
its arbitration process. The following
are the advantages of AAA arbitration
which makes it a popular institution
worldwide for resolution of disputes:
1. Subject matter expertise: The AAA
has a panel of arbitrators who are
experts in various fields such as engineers, accountants and academicians.
institutions, where the matter may
stretch for the longest time. The AAA
also has a fixed fee structure. Unlike
this, Indian arbitrators postpone the
hearings thus increasing the number
of sittings which results in increased
arbitration-related expenses.
3. Confidentiality: Unlike Indian institutions such as the ICA which do not
February 2015
CFO india
in practice
However, no such supervision is made
over the awards passed by Indian institutions and the only recourse to parties
in case of a grievance in the award made
is to approach the courts.
6. Admission: Under the rules of few
Indian institutions such as the ICA,
there are rules which allow the registrar of the institution to either accept
or reject an application for arbitration
based on their discretion (See Rule 17).
In contrast, the AAA provides more
comfort to the parties approaching it for
resolution as the AAA rules do not allow
it to reject applications.
7. Professionalism: Most international
have any strict rules governing the confidentiality of proceedings, the AAA has
strict canons governing the obligations
of arbitrators to maintain confidentiality of the proceedings. The rules require
that the arbitrator maintain privacy of
the hearings and exclude parties who
are not ‘essential’ to the proceeding at
hand. As for the parties, under the AAA
rules, the parties can decide in advance
if they want to keep the decision of the
arbitrators as confidential and can even
decide that the decision should not be
made in writing.
4. Discovery: The A A A rules provide for discovery procedure which
Madhavi Ravishankar
“The legal system
in India has to
use its powers
to innovate and
advance the
dispute resolution
methods in India.”
Senior legal counsel, Sasken
allows an arbitrator to direct discovery or exchange of information at
the request of a party. This is done in
cases which require expedited closure.
This can involve directing a subpoena
for witnesses or documents as may be
required for the proceedings.
5. Supervision: The AAA, although an
independent institution, has its proceedings supervised by the ICDR. Due
to this, it refrains from taking any arbitrary actions and renders its decisions
after seeking guidance from ICDR.
The awards made by the AAA are often
reviewed by the ICDR which gives scope
for correction of any errors in awards
prior to it being released to the parties.
CFO india
February 2015
institutions are very professional and
strive to maintain business relations
by conducting the arbitrations in a less
contentious manner so that it does not
adversely affect the business relationship between the parties.
Another advantage of international
institutional arbitration stems from the
level of confidentiality maintained by
the institution regarding the dispute so
that it does not become a matter of public record or viewed as a bad precedent.
It must be noted that domestic arbitral
institutions should have the ability to
support international arbitration positively. The key to this is the capacity of
the legal system in India to imbibe the
arbitration spirit and process as practised internationally. The legal system
in India has to use its powers to innovate and advance the dispute resolution
methods in India.
The first step towards this is to
increase the number of domestic arbitral institutions which are sensitive to
the local norms.
The next step would be to increase
the number of arbitrators and also
to invest in developing the skills and
expertise of these arbitrators, leading
to a more professional and competent
pool of arbitrators. Further, there must
be a concerted effort to ensuring the
enforceability of awards rendered so
that they also attract more foreign
investment into the country.
The parties from developing countries often find international arbitration to be very expensive. Though
successful parties are able to recover
almost the entire costs of the arbitration, they need to be aware that losing
an international arbitration greatly
increases the risk of having to bear
the entire arbitration costs. This being
the case, it would greatly help businesses operating in India and those
doing business with Indian entities
if the Indian arbitrations institutions
are improved and brought on par
with the International institutions. It
cannot be denied that there do remain
certain gaps in the working of the
Indian institutions, but if well thought
effort is expended to plug these gaps it
will go a long way in boosting the confidence among the business community in the Indian arbitration system
and institutions.
Sudha Munireddy is the head of legal
department at Sasken while Madhavi
Ravishankar is the senior legal counsel.
The above is a extract of a paper written by the two authors on the comparative
advanatges of other global centres of aribitration as compared to India.
in practice
Governance gets
a tech impetus
Two separate projects show the way on how present day
governance models can gain from technology inputs.
Sanjay Kumar
he Gover nment of India
is seriously adopting the latest available technologies to bring responsiveness to the government administrative machine. One uses biometrics
to ensure attendance, while the other
uses cloud to aggregating services.
As part of “Digital India” program,
the government plans to phase out the
manual system of attendance in all
central government offices, and replace
it with an Aadhaar-enabled biometric
attendance system (AEBAS).
AEBAS is designed to enable an
employee record attendance by presenting their biometric identification
such as finger print or iris. This will
be authenticated online by matching
it with the biometric details stored
in the UIDAI (Unique Identification
Authority of India) data base against
the employee’s Aadhaar card number.
CFO india
February 2015
T he key objective of deploy ing
AEBAS is to eliminate the ‘proxy attendance’ arrangement that is widely prevalent in government offices that use
the register attendance system. A biometric system will ensure that workers physically turn up for work, and
will act as a deterrent to habitual latecomers. Currently, the Central Government ministries, departments, subordinate offices, autonomous bodies and
Central Public Sector Units (CPSU) are
being covered under AEBAS.
In the Phase-I of the project, nearly
148 organisations, accounting for
more than 49,000 employees have
been covered. The attendance of all
employees registered on the system
is visible in real time on the common
attendance portal.
To implement AEBAS, each ministry or department has been asked to nominate a Nodal Officer (at the rank
of Joint Secretary or higher) to drive
the biometric attendance initiative.
Employees have to register online with
the attendance portal and the data is
verified by the quality-check team
of UIDAI or the Nodal officer. After
approval, the employee becomes active
in the portal, and can mark attendance through the biometric sensors
installed at various locations. The portal’s dashboard reports show the location (building) where an employee has
marked his/her attendance.
In the second phase of the program,
the government departments will use
the common biometric attendance portal managed by National Informatics
Centre (NIC) data centre.
Architecture of AEBAS has been
designed by National Informatics Centre (NIC). The system is divided into
two major components: front and back
end systems. The front-end system
(Attendance System) captures the data
in practice
Part of
India” the
system will
the way
of employees through a BAS terminal
like an Android tablet or a desktop PC.
The client application running on the
terminal prompts employees to provide
biometric data via fingerprint or iris
scan. The captured data is sent to the
back end system.
The back-end system (Attendance
Server) performs authentication and
response using the Aadhaar authentication API (Application Program
Interface) requirements. It is connected to the UIDAI for real-time biometric authentication.
The government has planned alternatives for ensuring seamless connectivity of biometric devices. The first is
to use the GPRS/Wi-Fi connection on
NIC network (NICNET)/broadband.
The second is to employ SIM-based
GSM connectivity on tablets. The
required Wi-Fi and 3G/2G connectivity systems will be procured through
the Directorate General of Supplies &
Disposals (DGS&D) rate contract sys-
tem by each office. A minimum bandwidth of 1 Mbps is envisaged to handle
the load during peak hours (0800 Hrs1100 Hrs and 1600 Hrs– 1900 Hrs).
Also, to reduce user frustration
and improve system performance,
UIDAI has extended the facility of
Best Finger Detection.
T he Gover nment of India (GOI)
Cloud project (Mehgraj) is an ambitious cloud computing architecture
for government department and agencies. The first phase of the project was
launched on February 4, 2014 and is
being implemented by the National
Informatics Center (NIC). Currently,
61 departments are using services of
the National Cloud.
According to the Strategic Direction
Paper, Meghraj will address issues
such as standardisation, under-utilisation, and interoperability and amalgamation of e-services. The government
is also expected to use the services
of private cloud operators based on
demand and security considerations.
Managed Service Providers (MSPs)
will be contracted for operating and
managing the Meghraj system.
GOI Cloud will provide a single
directory of services and will help
government departments eliminate
the lengthy procurement processes
for ICT (Information & Communications Technology) infrastructure.
According to Renu Budhiraja, Senior
Director, e-Governance, Department
of Electronics & Information Technology (DeitY), “Meghraj is an extremely
important and relevant technology
to create a paradigm shift in the way
government procures IT and deploys
e-governance applications.”
To support the project, an ‘eGov AppStore’ was also started on May 31, 2013
to provide user departments with a variety of “pre-canned” solutions. These
applications are customisable and reusFebruary 2015
CFO india
in practice
able for multiple government agencies.
Currently, 42 applications are available
in the AppStore.
To create seamless operating infrastructure, the plan is to have inter-connected network and data centers across
the country, and link up with the existing network systems such as State Wide
Area Network (SWAN), National Knowledge Network (NKN) and the National
Optical Fibre Network (NOFN).
Services & Benefits
Presently following cloud services
are available:
Infrastructure-as-a-Service (IaaS):
Meghraj offers on-demand storage and
network facilities.
Platform-as-a-Service (PaaS): Programming languages and tools have
been made available for developing and
testing of applications.
Software-as-a-Service (SaaS): Core
and regular applications such as payment gateways & messaging platforms
are available in the eGov AppStores.
‘Meghraj is a relevant technology
to create a paradigm shift in the
way government procures IT and
deploys e-governance applications.”
Storage as a Service (STaaS): Meghraj
is expected to expand user mobility
through shared data and applications
stored in the cloud.
Governance Structure
A high level committee chaired by the
Secretary, DeitY has been formed with
representation from central ministries
and departments, state governments
and other institutions. This body provides strategic direction and guidance
on key matters of GI Cloud. An Architecture Management Office (AMO) is
being created under DeitY to define
guidelines for security and risk-mitigation. “Additionally, capacity building
programs will create essential awareness regarding security related aspects
among cloud users and service providers,” says Budhiraja.
The government is also developing
an accreditation mechanism for private
players, and is examining potential revenue models.
Further, the focus is on developing
applications for the e-Gov AppStore in
tandem with private players.
These cases first appeared on the CIO&
Leader website.
At the end of the day,
beyond the meetings,
the smooth talk,
the frills and the fights.
Have you made
Let the world know
Apply for the Business Impact Awards 2015
Key Questions for
Leaders in 2015
Asking the right questions is often the key to
discovering the path ahead to progress.
The new year has been upon us for a few weeks now, and depending on your
organisation’s financial year, most of us will be looking forward to the latest news,
trends and issues that will matter most to us in 2015.
Four questions may be key to how you respond to 2015’ challenges. And in a
simple and succinct manner these are:
1) your role & purpose in one word
David Lim is Asia’s Leadership
Coach, and best known for
leading the 1st Singapore Mt
Everest Expedition. Since 1999,
he has helped organizations
build teams and grow leaders.
Send him a note today at
com to subscribe to a no-cost
leadership e-newsletter.
CFO india
February 2015
The time is right to revisit why you do what you do. It may seem simple, but in the
crush of the daily commute, firefighting and pressing meetings it is important to
describe exactly how you see yourself in your role.
Are you an “accelerator” of business; helping the group move faster with on-time
reports on their finances, and delivering means to leverage your organisation’s cash
flow? Or perhaps you are an “enabler”? Someone who uses finance and the associated tools to ‘enable’ others to expand, build, create and deliver solutions to better
the condition of their customers.
A simple, yet powerful way is to imagine you’re speaking to an intelligent 10 year
old, and needing to explain, in the shortest, simplest, yet most truthful manner,
exactly what you do at work.
Understanding your deep purpose in your own context is immensely powerful.
It gives you leadership clarity at every stage of action, and helps you persist when
you encounter obstacles and setbacks.
leader’s world
2) your biggest concern
from internal perspective?
According to 2015 Finance Priorities Survey from the Financial Executives Research
Foundation and consulting firm Protiviti,
the five key concerns from an internal perspective are strategic planning, budgeting,
compliance with regulations, profit analysis
and cash forecasting. These seem to be the
most pressing concerns for top executives.
Even as leader of large expeditions to the
great peaks in the past, no one is immune
to these key issues. What would be our
strategy and approach to reach the summit? Would we be employing lightweight
and swift alpine style approaches, or adopting a more resource-intensive siege–style
approach? What are our funds prior to the
expedition? Would we need to hedge some
funds in light of major currency swings?
Will the recent changes to the permit system in assessing mountains in Nepal have
an impact on our plans?
However of all the major concerns, the
greatest number of the 372 respondents
identified strategic planning as the biggest
concern. And so it should be. Strategy planning helps you align and deploy resources,
sets a way forward with the constraints and
resources that you have. The biggest red
flag though, should be the extent to which
you and your team can execute the strategy. In many cases,
strategy planning with an unclear path to execute leads to
confusion, backtracking and utter failure to deliver the result
wanted. Do you share a similar set of concerns?
Far too much energy
goes into goal setting when
the right focus should be
on processes.
3) biggest concern from global
For many, it comes down to volatility whether it is in the form
of geopolitical upheavals in the Middle East, tension in East
Europe because the Ukraine conflict; the case of OPEC oil
versus shale oil from the USA; tensions from reforms in
India to create a more sustainable economy and the impact of
currency fluctuations on trade and an export-driven economy.
Some of you are already aware of and use SWOT (Strengths,
Weaknesses, Opportunities and Threats) analysis to help create a path for the year ahead. However, at the geopolitical or
external concerns level, it may be better to use a PEST analysis (Political, Economic, Social and Technological) – outlining specific aspects that are will affect your unique situation.
Taking each in turn, from the Political view, what might the
politics and policies of the day do to your 2015 plan? How will
compliance play a role to stymie or protect gains made? Economic: interest rates that will rise, taxes, financial reforms,
your hedge/bets and inflation that will play a part. Social:
what are your customers asking for in their ever-increasingly
connected lifestyle and expectations? Technology: Patents,
licensing, Big Data, Cloud – how will these have an impact
on your business . I see maybe 10 times more SWOT analysis
than PEST ones and getting the analysis right in the PEST
exercise goes a long way in helping you gain clarity.
4) What will you do at the process
level to get your goals?
It is the last but not least important question. Process determines the series of steps, habits, behaviours and daily action
that you and your team will need to consider and take in orde
to achieve your goal. I feel far too much energy at this time of
the year goes into goal-setting when the right focus should be
on the steps and processes you are committed to take or do to
get what you want.
And this includes winning the buy-in for these processes
from your nearest and closest team.
February 2015
CFO india
It is already February 2015. If work is
keeping you busy, do consider a few minutes
for the sheer power of the Audi RS 7. And
in a more reflective mood, check out what
a fellow finance professional takes you
towards reflectionn.
Audi rs7
Stealth Fighter
Did you
RS7, the most powerful production Audi, is one really
fast car to drive in the real world. Amit Chhangani
Fast means different things for different
people. And the reference point keeps changing perennially. I think I am, after a fair bit of
time, writing about something which I really
believe is a remarkably fast car. The Audi RS7,
the most powerful production Audi, has made
some alterations to my previous definition
of fast; the reference point has changed, yet
again. The RS7, then, is an earth shatteringly
fast car, in a beguilingly and unflappable way.
You cannot do justice to an RS7 review
without talking about its monumentally incredible output figures. Testing the fortitude of
CFO india
February 2015
German engineering is the 4.0 TFSI, pushing
the pistons relentlessly to dish out an extraordinary 560 HP of peak power between 5,700 and
6,600 rpm. Trying its best to bend the metallic
components it has any association with is 700
Nm of inexorable torque, available between a
super wide 1750-5500 rpm rev band.
A 0-100km/h sprint time of 3.9s for this near
2-ton leviathan is impressive, but inconsequential. There are other cars which log a quicker
time. The RS7, however, delivers an experience
which no other car its size possibly does.
The response from that 4.0 liter twin turbo
German auto
maker, Audi’s
name is the Latin
translation of the
founder’s surname.
August Horch
was the founder.
Horch means listen
in German and
translates to Audi
in Latin.
on Wheels
petrol unit is stupefying to say the
least. The deluge of that gushing
torque launches this quadruped to
psychotic speeds before you even realize it. On a humid Mumbai afternoon
as you drive the RS7 on the wide, open
straight on the expressway to Pune, it
just taken a brief moment when you
press the right pedal a little more than
gently and the next thing you know is
that the car has breached the double
ton mark. Even at that pace, the RS7 is
showing no signs of letting up.
What adds to the tranquillity inside
the cabin is the 8-speed Tiptronic auto
transmission. While it isn’t the quickest auto boxes around, and most definitely not as blazingly fast as Audi’s
very own dual clutch S-tronic, it’s not
a slouch by any definition. In manual
mode, the shifts take a wee moment
before getting executed, but there really isn’t anything to complain.
The RS7 also comes equipped with
an active cylinder deactivation tech,
what Audi likes calling cylinder on
demand (COD). At low to moderate
load and engine speed, the system disengages four cylinders by closing their
valves and shutting off fuel injection.
So you can bring down fuel consumption by up to 10 percent. Audi claims
an overall fuel efficiency of 10.2 kmpl.
Of course, that’s not what you get in
the real world. During our enthusiastic run to and back from Lavasa,
we managed to get a little less than 6
kmpl from the car.
All that power and torque produced
by that 4-liter twin-turbo motor is
put down on the tar by the quattro
permanent all-wheel drive system. The
system transfers the drive 40:60 to
front and rear axles respectively. When
required, it can immediately distribute
up to 70 percent of the torque to the
front, or up to 85 percent to the rear.
And that technology come together
sublimely to accord the RS7 grip levels
which are exceptional in every sense
of the word. That complex drive architecture absolutely ensures that those
275/30 Z1 Pilot P-Zero tyres never wail
it is a powerful car. the rs7’s suspension in comfort mode offers
Price : ` 1.31 crore
(ex- showroom)
Tech Specs
Engine : 3993 cc,
twin turbo, petrol V8
Max Power: 560 bhp @
5,700 - 6,600 RPM
Max Torque: 700 Nm @
1750 - 5500 RPM
Mileage (ARAI):10.2 kmpl
Transmission: 8 speed
Drivetrain: Quattro AWD
or squeal. If you had to bet your life on the traction offered by a road going car, the RS7 has to a forerunner.
Inside the cabin, like most Audi cars, you can choose
from Comfort, Dynamic, Auto and Individual modes
with the twist of the central controller knob. For the
RS7, however, you also get to modify the sport differential, engine sound and tension on the drive belt.
For such an enormously powerful and fast car, the
RS7’s suspension in Comfort mode offers absorption
qualities which are as good as it gets. For the driver, the
suspension is mildly stiff, but manages to absorb all
the adversities that a paved Indian surface may throw
at it. Only the sharper ridges manage to filter inside the
cabin. The ride at the rear is a bit more bouncy though,
and while the driver would not have anything at all to
complain about, the passengers would more often than
not whine about the stiff springs. The predictability and
composure of the RS7 is the stuff legends are made of.
The only downside is, it wouldn’t titillate, excite and
enthral you along the way as well as probably an M5 or
a Jaguar F-type would. There’s one thing the RS7 does
better than almost any car we have driven. It’s fast.
Incredibly, monumentally and unforgettably fast.
February 2015
CFO india
CFO India Events
think tank of CFOs
In early January, top notch finance professionals
came together to form The CFO Board.
Former SEBI chairman, M.
Damodaran is the chair for The
CFO Board.
Minister of
State for
Finance, Jayant
Sinha addressed
the inaugural
meeting of The
CFO Board.
In a unique initiative, senior
finance professionals came together on
January 9 to institute the CFO Board
(TCB), a think tank to engage with policy
makers on substantive economic, financial and governance issues.
Conceived by CFO India and KPMG,
the board will be chaired by M. Damodaran, former SEBI chairman and leading voice for corporate governance. The
working group which has 23 members
with over 500 years of combined experience expects to effect policy change
through dialogue and sharing of information, insights, effective practices and
international benchmarks, whenever
and wherever required.
Setting the tone for the expectations
from the TCB, the inaugural meeting
was addressed by Jayant Sinha, minister of state for finance. Sinha outlined
the urgent need to share ideas for
nation building. “The government is
serious about restarting the investment
cycle and sustainable job creation. The
CFO Board is a great initiative. We hope
it will allow the government and other
CFO india
stakeholders to tap into the considerable
expertise of the finance sector veterans
in an unbiased manner,” he said.
The board members were pleasantly
surprised by the candour of the minister.
And they were hopeful that the Board
would allow them to make serious and
unbiased interventions in the interest of nation-building. The CFO Board
intends to emerge as the most credible,
informed and non-partisan view of the
CFO community. It will choose its circle of work carefully on the basis of the
value that it’s interventions can bring to
national discourse. “We expect this initiative will allow us to share our expertise
with policy makers and other stakeholders in a manner that has impact and
is non-partisan,” said YM Deosthalee,
CMD, L&T Finance Holdings.
Mr Damodaran summed up the feelings of the room when he said “India
is moving towards fulfillment of its
potential. The CFO Board has come
into being with the intention of using
the collective wisdom of the group in
the large national cause.”
The CFO Board has been envisioned
with a view to lead engagement with
policy-makers and other stakeholders
on matters that impact fiscal, monetary
and governance matters. Its experience,
wisdom and insights could serve policy-making by providing well-informed,
implementable, non-partisan inputs –
beyond company and industry specific
agendas – given the criticality of private
enterprise to India’s growth.
Anuradha Das Mathur, Editor, CFO
India articulated the need for TCB when
she said, “despite the critical role played
by the this community, senior finance
professionals have had no share of
voice. While they are the most impacted
by developments in the economy for a
variety of reasons, the CFO community
faces a vacuum in dialogue.”
cfo lounge
new launches
Nokia Lumia 830
The last of the Nokia
Lumia phones, the
830 features a sharp
metal frame with an
anodized finish giving
it a flagship feel.
The 5-inch display is
sharp and bright, the
contrast is great and the colours look
rich thanks to the adoption of AMOLED
display technology. The smartphone
runs on Windows Phone 8.1 with
the latest Denim update. Somehow it
doesn’t justify the price. Price 26,835
Hot Spot
Gionee Elife S5.1
Beauty, not a beast. Prasid Banerjee
It’s not often that we’re wowed by
the design of a smartphone, but this
one did it. The Gionee Elife S5.1 is one
of the slimmest smartphones in the
world and leaves no stone unturned in
terms of design and build. The device
is like a flattened Xperia smartphone,
which makes the iPhone 6 feel bulky.
It weighs only 97.7 grams, making it
lighter than most other phones. The
glass back makes it a bit slippery, but
slapping on a cover takes care of that
and pretty much everyone does that.
On the build and design front, the
Elife S5.1 is actually one of the best
we’ve seen in a long time.
Sadly though, the design doesn’t go
with what’s inside. At 18,999, the
phone is grossly overpriced. The MediaTek MT6592 octa-core is available
on much cheaper devices, all of which
perform better than the Gionee Elife
S5.1. The processor doesn’t perform
well and the phone is underpowered, both on regular usage and on
benchmarks. Even 1 GB of RAM feels
a bit less given that Gionee’s AmigoUI
consumes a fair portion.
In addition, the battery life, though
better than what we expected, is nothing close to what its competitors come
with. The 4.8-inch display doesn’t feel
lacking but we’d have liked it better
had it sported a resolution of 1080p
instead of 720p.
The 8MP camera is pretty good in
normal light but fails under low light
conditions. While the camera is acceptable, the performance overall isn’t.
The brilliant design doesn’t make
up for a laggy experience and we can’t
quite recommend this smartphone.
Display: 4.8 inch 720p HD IPS;
Processor: 1.7 GHz MediaTek
MT6592 octa-core SoC; Battery:
2050 mAh; Operating System:
Android 4.4 KitKat; RAM: 2GB;
Price 18,999
Xiaomi Redmi
Note 3G
When you price a
phone at 8,999
and give it specs that
would otherwise cost
20,000, you’ve created
something fit for the
Indian market. The
overall design is too
plasticky and feels very cheap. The 13MP
rear camera is impressive. Redmi Note is
strictly a value for money smartphone.
HTC Re digital
HTC’s peculiar looking
device called the ‘Re’
is an attempt by the
Taiwanese OEM to take a
shot at the action camera
market. The camera is
portable, quite easy to use and looks
like an asthma inhaler. There are just
two button, one to take pictures and
record videos and the other to activate
the slow-mo mode. For the price, the Re
is a decent package. Price 9,999
powered by
cfo lounge
pick of the month
Coping with
Mid-Career Crisis
A finance professional looks at the
inevitable turmoil that typifies midcareer years.
Netherlands-based Partha Sarathi Basu works as a
guest lecturer, author and a columnist apart from being a
seasoned finance professional with over 25 years of
experience across various organisations such as Coca-Cola,
Whilrpool, IFB and the Tata Group. Currently Global
Director for finance operations with AkzoNobel NV, here
Basu in an email interview shares his thoughts about his
new book on ‘Mid-Career Crisis’ recently published by Collins Business. Excerpts:
Why is it important to be aware of the
mid-career crisis?
Last many years, I have been closely studying people,
listening to their stories to understand why some powers
ahead in their career while for the rest progress slows down
sometime during their mid-career years.
I wondered why do only a few people reach the top while
others fall behind after a good progression in the first few
years of their careers? Are professionals who continue to
grow in their careers different from the rest? Do they possess superior knowledge, sharper leadership skills or better
educational qualifications? Or is it sheer luck that helps
some sail through at work while others start experiencing a
plateau as they reach these middle years?
Over time, I realised that mid-career is a stage where
many of us go through some confusion (C) in mind which
CFO india
February 2015
Number of pages: 192 pages
Publisher: HarperCollins
Language: English
Cost of the book: Rs 500
leads many changes (C) in our behaviour in our corporate
life leading us to a less effective way of delivery.
The problem is most of us, do not even recognize this
change in ourselves and start sliding down hill which leads
us to a sense of misery (M), a sense of self-pity and a loss of
confidence that pushes us towards more difficulty.
It is like a disease that needs to be detected early to cure.
And hence it is important that we be aware of our Misery
Changes & Confusion (MCC) and work on it.
How can finance professionals proactively deal
with their version of this crisis?
We are first humans and only then finance professionals.
Thus like any other professionals, we finance professionals too need to deal with MCC proactively and address it in
time. A person can steer his way when he or she is aware
of an issue and thus the first step towards dealing with
the situation is to recognize the symptoms and be ready
cfo launge Books
to embrace the change. As I mentioned earlier, mid-career
crisis starts with certain confusion in mind and can finally
lead us to a sense of misery. Or it can be vice versa. And in
between, due to this state of mind, many myths play in our
mind which affect our attitude and effectiveness. I have spoken about 14 myths and 14 effects in the book. As finance
professionals, we need to be aware of such myths and arrest
any negative change in us.
How does this largely individual phenomenon
mesh with the overall organisation-wide issues
around appropriate talent at senior levels?
A corporation cannot progress without motivated individuals. The success of a corporation largely depends on the
talent they nurture. And hence logically, if individuals can
avoid a mid-career crisis, they would do good for themselves
as well the corporation at large.
What advice would you offer younger
finance professionals?
When we think of our corporate career life cycle, we can
divide it into five stages: The first stage is when we prepare
ourselves for our corporate journey. The second stage is the
first few years of our career when we learn new things and
achieve new heights.
The third stage is when we pass through these middle
years of our career. The fourth stage is when we pass
through the last years of our career. By then we almost
know whether we are heading towards the goal we had set
for ourselves many years ago. And the last stage is when
we decide to hang up our boots, sit back and look back on
our journey. While all these stages are equally important
in one’s life, a sense of crisis is palpable in most professionals’ lives around mid-career. Around this time, we have
spent a considerable number of years at work and achieved
good amount of success. We start leading teams and our
opinions are valued. At this stage, we have an idea about
what is next in our career but are seldom clear on when
and how we can reach there. It is a point of inflection and a
stage of transition.
And, like any stage of transition, I would advise the
youngsters to prepare carefully and navigate carefully
through this stage.
Why did you include 10 CEO life stories
in the book?
During this amazing journey to understand the different
phases of what I call the MCC, I approached a few senior
corporate leaders and discussed my observations with them.
I also asked them to share their personal experiences. While
some of them refused, most agreed. And they have generously shared their learnings and their experiences and even
the moves they made during this stage of their career.
I was amazed to find how neatly these personal stories
“Logically, if individuals
can avoid a mid-career
crisis, they would do
good for themselves as
well as the corporation
at large.”
Partha Basu
Global Director- Finance Operations,
AkzoNobel NV
fitted into the patterns I had observed and how well they
illustrated the theme of this book: why some sail through
while others don’t.
Hence, in this book I took break from the normal monologue style of a management books. I have explained the
issues through near real life corporate stories which professionals can relate to, and if the readers exclaim. I think I
know this person or oh my god, this is exactly what has
happened to me then my effort will be successful.
The book thus has 34 near-life short stories from
the corporate world (summarised by management
lessons) to ensure that the readers relate to a situation
in a practical manner.
The views expressed in the interview is personal in nature, and
nothing to do with the beliefs of Akzonobel N.V.
February 2015
CFO india
not just
the last word
Unpredictable Central Banks:
shape of things to come?
or the last several months, Indian
industry had been pleading for
an interest rate cut to help the
economy. The Government of India
and the Ministry of Finance, too, gave
enough indications of their strong preference–that the Central Bank should
consider slashing interest rates to egg
growth along. But, to no avail.
T h e Re s e r v e B a n k Go v e r n o r,
Raghuram Rajan, in his characteristic – polite, seemingly accommodating, but unrelenting style – stood firm.
He maintained that the signals in the
economy needed to trend positive –
consistently – before the Central Bank
responded. Not much changed between
his last policy statement in late November and the sudden announcement on
14th January reducing the interest rate
by 25 basis points. Of course, we aren’t
complaining because it was what we
were hoping for. But till the cut became
public, there was little to suggest that it
was on the cards. It was almost like the
intention was to surprise.
Cut to the scene of the Swiss Central
Bank. Three years ago, it fixed a floor
for the Swiss franc. The stated and overt
monetary policy policy objective was
to not let the Swiss Franc appreciate
beyond a point – essentially to protect
Swiss exporters – known for their highquality, high-value products. Life was
chugging along, and suddenly last week
– the same time as India’s rate cut – the
Swiss Central Bank turned its policy on
CFO india
February 2015
its head. The Swiss franc soared against
the euro by a dizzying 30 per cent. No
prior warning, just like that.
While there isn’t enough information
available, yet, on who will suffer or perish – for example commercial banks
that have provided currency hedges and
of course, exporters – it would be fair to
expect bloodshed in the ecosystem.
And maybe that’s fair. It isn’t the job
of central bankers to keep businesses
safe. If they announced their policies
beforehand, the theory of rational expectations would suggest that they wouldn’t
be able to achieve their objectives. It is
just that central banks over the years
have behaved sedately and predictably.
If they want to alter behaviour now, to
achieve greater impact with their policy
instruments, then we must recognise
that and build it into our expectations.
An article written by Clive Crook, the
Bloomberg View columnist argues that
Central Banks have only two jobs – keep
inflation low and keep politics out of
monetary policy decisions. However,
with recessionary pressures and problems of unemployment, how bereft can
Central Banks remain of politics and
the realities surrounding them?
The US Fed, over the years, had managed to extract a high degree of autonomy for itself, but their economic and
social context has managed to weaken
the resolve. At such times, is it going to
be possible to keep politics out of Central Bank decisions?
The next one on the radar is the
European Central Bank and its verdict
around Quantitative Easing. As we go
to print, speculation is rife around the
announcement and its scale. The implications for the Euro and every other
related currency will be watched closely
– and here too, there is an element of
the unknown.
Analysts, bankers and CFOs expect to
be surprised by politicians, competitors
and markets. But Central Bankers? Not
yet. Is it time to introduce one more risk
parameter into our decision matrices, or
is this just an aberration?
I, personally, think it is more
fundamental than a blip, but what do
you think?
Anuradha Das Mathur, Editor, CFO India