Till Kamalesh Chandra Chakrabarty moved to Indian Bank, those watching the sector would often describe him as an economist and a planner. It was not surprising because he started his career in 1978 as a planning officer in Bank of Baroda, where he went on to head the economic research and corporate planning departments.
Chakrabarty, who is now chairman and managing director (CMD) of Punjab National Bank (PNB), was appointed deputy governor of the Reserve Bank of India (RBI) on Saturday, in what appears to be a logical culmination of his career. Chakrabarty grew up in Orissa and moved to Varanasi where he acquired a master’s degree in statistics and a doctorate from the Benaras Hindu University. A gold medalist in statistics, Chakrabarty taught for five years before he joined Bank of Baroda in 1978.
His image changed once he took over as CMD of Indian Bank. He ensured that the Chennai-headquartered bank built on the restructuring and the cleaning up that was done before he took over. He oversaw the successful initial public offer of an entity which till not very long ago had been categorised as a weak bank.
The government rewarded Chakrabarty who turns 57 on June 27, by sending him to PNB, a bank where he had been executive director earlier. During the last two years as PNB chairman he has gone about restructuring two subsidiaries, PNB Gilts and PNB Housing Finance. While the former is being merged with the bank, a stake sale is planned in case of the home finance arm. In addition, he has tried to expand the bank’s global footprint and was planning to set up branches in Fiji, New Zealand and Australia in addition to the over half-a-dozen overseas branches that the country’s second largest public sector bank has.
“He is very quick at taking decisions. You send him any number of files and they would be returned the next morning with a decision taken on the proposal,” says a PNB general manager.
“He is a doer. He has shown results wherever he has gone, from Bank of Baroda’s London office to his present assignment,” says India Infrastructure Finance Company Chairman SS Kohli, who was Chakrabarty’s boss at PNB. The stint in London is often cited as the turning point in Chakrabarty’s career since he made the operations profitable.
His critics also say that his stance is governed by what the government expects from public sector banks. They point out that in line with the government’s agenda of financial inclusion, Chakrabarty went about launching schemes in Tamil Nadu, a state which had sent P Chidambaram, the then finance minister, to the Lok Sabha. But it could also be argued that this was in line with his philosophy; Chakrabarty believes that the poor hold the key to the next wave of expansion for banks.
Chakrabarty has also been extremely aggressive in cutting interest rates over the last six months. While State Bank of India, the country’s largest bank, reduced the prime lending rate by 150 basis points, PNB slashed it by 300 basis points. PNB executives justify this by pointing out that lending rates are a function of cost of funds and the net interest margin — and the Delhi-headquartered bank has managed to maintain healthy margins despite lower rates.
Known to be outspoken, Chakrabarty has in recent months spoken out on behalf of public sector banks, not just in public but also during closed-door meetings with the government and the RBI.
Initially, Chakrabarty was not keen on the deputy governor’s job since a three-year term would have meant that he retired before he turned 60. But whether he liked it or not, the PNB chief emerged as the top contender. The statistician’s stint in three banks, spread across the country, should have prepared him well for the task ahead.
