When the grouping of Brazil, Russia, India, China and South Africa announced a plan to set up a Brics Bank last year, there were many doubters. Now, with ICICI Bank Chairman KV Kamath chosen as its first chief, the idea looks set to gain purpose and direction from the man credited with changing the face of Indian banking.
Prime Minister Narendra Modi's government nominated the 67 year-old banker, who's also chairman of Infosys, to head the proposed multilateral bank. Brics sees the bank as a replacement for international development institutions such as the International Monetary Fund and the World Bank, regarded by many as pushing the political and social agenda of the West.
The proposal took shape at the 2014 Brics summit in Fortaleza, Brazil, when the five-nation grouping agreed to form a $50-billion development bank with equal contribution from each member to be headquartered in Shanghai and headed by an Indian. It would fund infrastructure and sustainable projects. “We remain disappointed and seriously concerned with the current non-implementation of the 2010 International Monetary Fund reforms, which negatively impacts on the IMF's legitimacy, credibility and effectiveness,“ the Brics leaders had declared at the summit.
Kamath has the experience and the range required for the task at hand. Prior to coming back to head ICICI Bank in 1996, the management graduate was a development banker at the Japan-dominated Asian Development Bank. That gave him the opportunity to see how the Asian Tigers evolved into modern economies from closed ones. In his role overseeing the private sector at the ADB, Kamath was involved in the decision-making and investment processes in countries such as China, Vietnam, India, Indonesia and Bangladesh.
At the Brics Bank, Kamath will need to balance the strong forces that may seek to influence policies, apart from making crucial decisions on investments. The mechanical engineer and Indian Institute of Management, Ahmedabad, graduate cut his professional teeth at the Industrial Credit and Investment Corporation of India, a term lending institution that funded long-term projects including infrastructure. This would eventually morph into ICICI Bank.
In 1988, a few years before India opened up its economy in 1991, he moved to Manila and the ADB to try his hand at an international assignment when nothing much was moving in the domestic market. Then his mentor at ICICI, the venerable N Vaghul, was able to tempt him back to head the institution in 1996 as the economic climate in India had changed following liberalisation. By then, Kamath was sold on the idea of a `universal bank' as conceived by Sandy Weill, Citigroup's former chief. As a proponent of the financial supermarket, Kamath first decided that there was no future for ICICI unless it was converted into a bank. Then followed brokerages, insurance ventures and many affiliate businesses. But he is also known for thinking big. He created a record in fund raising with a share sale Rs.25,000 crore in 2007, which remains a record. The capital for the Brics Bank is put at $50 billion, but with Kamath's financial engineering skills and vision, that may just be for starters.
No comments:
Post a Comment