Not all central bankers are pokerfaced, stick-in-the-mud types. RBI governor C Rangarajan had his audience in splits at the Bank Economists' Conference in Mumbai when he told them this story. A wealthy (Red) Indian chief, needing a loan, visited a bank. Before sanctioning the loan, the banker asked him to provide a specified number of cattlehead as collateral.

Being a wealthy man, he was able to provide the necessary security and was granted the loan. Later, when he returned to the bank to repay the loan, the branch manager noticed a wad of notes in the Indian's pocket and sought to convert him into a depositor. But the boot was on the other foot this time. "How many head of cattle can you offer as security"? asked the Indian.

`Wake me up before you go-go'

Syndicate Bank CMD NK Thingalaya looked lost just before the inaugural session of the conference. Thingalaya was seen wandering aimlessly around the conference hall as if he were sleep-walking.

Only after a volunteer gave him the name-badge and directed him to the podium did Thingalaya crashland on Planet Earth. Thingalaya kept his speech short, complaining of a sore throat, but started off from where he had left off during last year's economists' meet at Mahabaleswar, Maharashtra hill resort.

Last year, he had compared public sector banks to rickety buses rumbling down the highway with a directionless driver and an over-demanding conductor. This time around, he said these buses were now driving through narrow lanes-referring to the concept of `narrow' banks. Thingalaya said that the buses needed to be overhauled and given fresh coats of paint. His obsession with buses might just land him a job at the Karnataka State Road Transport Corporation when he retires from Syndicate Bank at the end of the month.

Latecomers all

BoI officials involved in the organisation of conference are a peeved lot. The copy of the RBI governor, C Rangarajan's, speech landed only in the morning delaying the photocoying and its handout to hacks. Ditto with BoI chairman, MG Bhide's speech. BoI officials handed out a hastly scribbled copy of the CEO speech to the assembled scribes. Said a hassled BoI official: "Look who are causing the problem...one just cannot complain".

Pariahs?

Scribes, it seemed, were an unwanted lot at the conference. The organisers decided to seat them in a corner of the hall from where they could not even get a decent view of the speakers. Not that every banker was worth looking at, but taking notes proved arduous since there were tables for barely six of them. Most scribes were seen loitering around.

Food and sleep

The two-and-a-half hour lunch break and the scrumptuous food came as a boon to all. The queue for the dessert stretched across the floor of the hall, and resembled a refugee kitchen. After tucking in a good meal, most bankers could be seen searching for corners for their afternoon siestas. Too bad for them that the place was packed.

Joshi's fireworks

The afternoon's technical session saw some spirited comments by the various speakers. PN Joshi, United Western Bank's chairman & CEO, and also an alternate chairman of the IBA committee of economists, set the ball rolling by singling out the negative attitude of Reserve Bank inspectors, the norms on NPA classification, and capital account convertibility (CAC) committee -- all at once.

Joshi castigated RBI inspectors for their "overriding ambition of identifying additional NPAs requiring more provisioning. The aim is to show that profits have been overstated". He addded that new thinking was needed at all levels, and "more so at the regulatory level".

Joshi also said that NPA provisioning norms on the priority sector front needed reworking. Pointing out that the agricultural season extended for six months, Joshi said that the inability of a borrower to service a loan for two quarters should not be construed as a provocation for treating the loan as NPA. Joshi continued his diatribe by saying that the CAC committee's pre-condition of a five per cent NPA level prior to convertibility was a revolutionary one given the situation prevailing in the country.

After Joshi's tough lines, the additional secretary (banking), ministry of finance, CM Vasudev said: "Thank you...that was quite a mouthful", before calling on the next luminary, RBI-consultant Urjit Patel, to say his bit.

`God, I have lost my papers'

Urjit Patel provided a bit of drama. Having lost his briefcase that contained his presentation papers just before the afternoon session, Patel threw a fit at poor BoI officials. Patel had apparently left his bag on the podium when some Smart Alec decided to walk away with it. BoI chairman MG Bhide made a fervent appeal to the audience to return the bag-which they did. And that was the bad news. The RBI-consultant then went on to deliver the most boring monologue of the afternoon. Not that anyone minded. Many of them were half snoozing after a healthy lunch.

Encore

The Canara Bank CMD's speech was the best of the lot. And as if in anticipation, the lights flickered for a brief moment. Among other things, TR Sridharan said that government should reduce its holding in public sector banks to 49 per cent as shareholder interest will clash with sarkari ones."Investors will question loans extended under the PMRY (prime minister's rojgar yojana). The government should also stop interfering by telling banks what cars they can use, and how many drivers they should keep."

One could almost hear bankers whispering "hear, hear." But that was not all. Sridharan said that the government should also not go about capitalising banks and that banks should be made to pay for their commercial decisions, including Canara Bank.

This, coming in the wake of the huge hit Canara Bank is taking by bailing out its mutual fund on Canstar, really woke up the audience. "I must be allowed to state if I will back up my subsidiary or not...Banks should have a close look at their subsidiaries' activities. Just because one bank got into merchant banking or asset managenment, other banks should not take a cue and jump into it".

Sridharan's frank views on government interference and capitalisation must have made additional secretary (banking) CM Vasudev blush. Button-holed by hacks on the lookout for an exclusive earlier in the day, Vasudev, ironically, said that the government was willing to recapitalise Canara Bank, if necessary.

Pretty woman

The compere of the conference, a certain Jaya Chatterjee, made gaffes galore. While introducing the additional secretary (banking), she said that he had served with the World Bank from 1883-1888. But Vasudev doesn't look all that old. Chatterjee also got her millions and billions all mixed up. While briefing delegates during the inaugural session, she mentioned that BoI had posted a net profit of Rs 3.6 million during 1996-97. We're sure BoI would not have been able to host the Bank Economists' Conference with a bottomline like that.

Say it again, Martin

The last speaker of the day, Stanchart's CEO Martin Fish, regaled everyone with genuine tabloid stuff. Said Fish: "I feel like Elizabeth Taylor's sixth husband on the wedding night...the issue is not what to do, but how to do it differently".

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.