An open letter

 An open letter to DFS or RBI or to whom?

Perceived, yet undefined, "conduct and behaviour" determine or detrimental to selection?:  It has been reported in the newspapers that Financial Services Institution Bureau (FSIB) is conducting interviews for the positions of MD & CEO in four public sector banks (PSBs), including that of Indian Bank (IB), where the present MD & CEO is retiring on 31st December 2024. Conduct of interviews for the position of MD & CEO of IB raised a few eyebrows in the banking circle, as the name of the ED of Bank of Maharashtra (BoM) was shortlisted by the FSIB for the said position in April 2024. The news item further reported that the decision of FSIB could not be completed to its logical conclusion, since Reserve Bank of India (RBI) appear to have taken a stance (in its communication to FSIB) that the "behaviour and conduct" of the said official "was not befitting his position and responsibilities concerning regulatory compliance" during the exit meeting conducted by its inspection team with the top management of BoM. The said official had no vigilance cases reported against him on the date of shortlisting and one of the deputy governors of RBI was also part of the panel that interviewed the candidates and made its selection. In this background, the negative communication from RBI, subsequently after the shortlisting,  about the "behaviour and conduct" is perplexing indeed. Was the official concerned, given a fair chance to explain his stand on its inspection team's observations about him, before RBI communicated its opinion to FSIB? No one really knows and will never know also.

Some fellow bankers' experiences with the inspecting officials of RBI: In my banking career spanning 37 years, I always found RBI inspection team to be professional and unbiased in its approach, though once or twice I did come across uncharitable questions from some individuals in the team. My colleagues, in the departments inspected, had some hurt feelings with the way some inspecting officials sought clarifications. My fellow bankers also had similar experiences with the individual inspection officials sometimes, but the report was always fair and fact based. In fact, a few years back, one of my close friends in another bank, who rose to one of the top management positions in his bank, shared his experience in the interaction meeting with the central bank officials, after the annual inspection by RBI was over. He said that at one point of time, a little bit agitated by the way the questions were asked, he raised his voice a bit unknowingly. On observing the facial observations of his senior colleagues, he realised his folly and toned down immediately. However, his colleagues were convinced that his 'raised voice' did play a role in the final rating of the bank, awarded by RBI later on.

My views are:

1. How the communication came out in the public domain? Normally the communications between the regulator and the finance ministry is never known. But the news item carried the communication with certain specific comments. If the said report is not true, one of the two viz. DFS or RBI could have at least made a press release, to set at rest any unwarranted apprehensions or impressions about RBI in the minds of the bankers/public. 

2. If the 'behaviour and conduct' as revealed by the news item is true, the following questions arise: 

(i) How RBI defines 'conduct and behaviour' in the interaction of bankers with the annual financial inspection (AFI) team in exit meetings. Not all human beings present their views in a uniform fashion. Everyone is entitled to forcefully present his views, if he is convinced that the remarks are unpolished/uncharitable or sweeping in nature. When the conduct is weighed, one should also 'factor' the expressions/questions preceding such answers and the contents of the whole conversation from both the sides. 

(ii) The said meeting was attended, among others, by the then MD & CEO of the said bank. It is difficult to imagine that an ED would have crossed the 'lakshman rekha', when his boss was leading the conversation with the AFI team.

(ii) The said officer was allowed to continue in his present ED position and was also allowed extension of two years, on completion of his present term, recently. When this is so, how his "conduct was not found fitting" to get selected to the position of MD & CEO of another PSB?

It will be better, if someone from the government or RBI issue a clarification that personal equations never come in the way of selection to top positions, especially now, since the said officer was shortlisted for the position in April 24 and fresh candidates are being interviewed for the same position by FSIB yet again. That will help erase the feeling that the perceived impressions of an AFI team matters more in the selection to higher positions, than clean record, merits and achievements of an individual.

Regards

V.Viswanathan

24th November 2024

A story: Lord Rama kept his bow by his side and placed the arrow on the ground, before retiring to bed. Next morning, when he took the arrow from the ground, he saw a frog bleeding under the arrow. Rama, the embodiment of compassion, asked the frog "When the arrow pierced you, why you did not raise your voice?". Frog replied "Whenever I am threatened by other sources, I cry - 'Rama, please come to my rescue' ; but when Lord Rama himself hits me, to whom should I plead?"