Newsmaker: Sunil Mehta has a tough task ahead on Stressed Asset Resolution

After submitting a five-point plan to fight toxic assets, Mehta's job has only just begun

For over a month, Sunil Mehta’s routine involved shuttling between two capitals — Mumbai, the financial one and Delhi, the political hot seat. This was a frenetic travel schedule with a cause: to put together a report in double quick time offering solutions to the critical issue of toxic assets.  

Sensing urgency to stem the rot in the financial sector and begin to work solutions, the government seems leaned on him, a seasoned and experienced banker from the private sector, ever since the problems came to light. First, it was to chair the board of Punjab National Bank and now, the mammoth task to get stress resolution going beyond NCLT’s work.
 

In the early part of 2017-18, he had to give up directorship on the board of State Bank of India, as government sounded him out to take up the chairmanship of Delhi-based Punjab National Bank. 

PNB’s reputation had been blown to pieces after the discovery of the over $2 billion trade finance fraud involving jeweller Nirav Modi triggered a probe and regulatory changes in the industry. That pushed him into salvage operations and to tighten risk management system and processes in the bank. While work continues on that front, it takes less of his time now as the dust has begun to settle after the initial shock and the management has taken control of the affairs.

Now, he can fully focus on the next big task: resolution of stressed assets in the financial sector where his work has only just begun. His engagement with stressed asset resolution does not seem limited to just furnishing the report under a stiff deadline of 15 days. Much more is expected of him in terms of putting together systems and processes for the report’s five-pronged resolution approach in the days ahead.  

This is a job Mehta feel excited about. “As a citizen of India, it is my responsibility towards the nation. I will do what I have to do. I do not look at this (job) as something I am doing for somebody else. I feel excited about the role and it gives me the satisfaction that time was spent on addressing critical issues,” he says when asked if the task would be a drain on his time and on his other entrepreneurial ventures.

One thing that those who know him vouch for is his ability to juggle many balls at the same time and still keep track of what’s important to him. A senior State Bank of India executive describes him as a straight-forward person who never lets go of his focus on the big picture. “He has a cool and determined approach to the task at hand and that makes him stand apart,” he says.     

After graduating from the prestigious Shri Ram College of Commerce in Delhi in 1978, he studied to become a chartered account. 
 

He cut his teeth in corporate banking during his stint at Citibank, where he spent 18 long years in various senior positions including Group Head-Corporate Banking, Northern India, Head Public Sector, India, and Senior Risk Manager. His last assignment at the bank was as Corporate Head in India and Senior Credit Officer. He spearheaded the development and execution of Citigroup's Corporate Banking and Risk Management business plan in the country, successfully developing its embedded bank franchise.
 

In 2000, he switched over to another US-based financial service giant AIG, where he worked for 12 years and was responsible for all AIG businesses in India covering Insurance, Financial Services and Investments. He was instrumental in setting up AIG’s insurance joint venture with Tata, and was also involved in expanding AIG’s presence across ten businesses, including Life & Non-Life Insurance, Private Equity, Asset Management and Real Estate. 

He donned the entrepreneurial hat in 2013 by setting up SPM Capital Advisors, an advisory and consultancy firm that works with large corporations on matters of strategy and policy. Mehta is an active member of the industry and can be often seen at various events organised by chambers of commerce. He has also helmed several of them. He is a past Chairman of the American Chamber Of Commerce In India and closely associated with the US-India Business Council, besides being the founding Board member of Asia Society India Centre and  past Chairman of Action for Ability Development and Inclusion. One of Mehta’s interests outside of finance is social entrepreneurship. He is the immediate past Chairman of United Way of India, which mobilises the caring power of communities to improve the lives of people living in Mumbai. 

Yet, in many ways, his job has begun in earnest only now. Elaborating on his next steps, he says banks will begin work on fleshing out the structure for the Asset Management Company to manage loans above Rs 5 billion and formation of oversight committees for firming up inter-creditor agreements and a trading platform for smaller assets.
 

There are ambiguities surrounding these structures and how quickly those are resolved and clarified will determine the outcome of his task. With over Rs 3.8 trillion worth of stressed assets coming up for resolution by September 2018, there is little time left to contemplate. 

“Mehta is serious about his work. His efforts now need government support,” says a top private sector banker who has worked with him.