FM clears Gupta for top post in IDBI

MUMBAI, June 30: Finance minister Yashwant Sinha has cleared the Unit Trust of India chairman G P Gupta's name for the top slot in the Indus...

MUMBAI, June 30: Finance minister Yashwant Sinha has cleared the Unit Trust of India chairman G P Gupta’s name for the top slot in the Industrial Development Bank of India (IDBI) despite opposition by minister of state for finance R Janadhanam.

Gupta, who was earlier executive director with the IDBI, became the UTI chairman last year. In absence of any official communication from the finance ministry about his successor till late evening, S H Khan, the outgoing IDBI chairman, called up banking secretary C M Vasudev. On Vasudev’s advice, Khan demitted his office without formally handing over charge to any of his senior executives. "Today is my last day. I have demitted the office. I have communicated this to the government," Khan said late in the evening.

About his successor, Khan said: "It is the government’s responsibility to find out the right person.” Sinha took the step in consultation with the finance secretary Montek Singh Ahluwalia. The note forwarding Gupta’s appointment was sent to the primeminister on Saturday.

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Sinha overruled the note of dissent on Gupta’s appointment as IDBI chief but the appointment still awaits the approval of the PMO which had not arrived till Tuesday evening. This is for the first time in the history of the term-lending institution that the government has failed to announce the new chairman’s name on the expiry of the term of the current chief.

Insiders in the finance ministry said that Janadhanam is reported to have pitched for one of the IDBI executive directors to head of the country’s largest development finance institution.

North Block sources are tight lipped about the exact nature of dissent by the minister of state for finance. Apparently Janadhanan is of the view that an internal candidate would be better suited to take over IDBI than someone from outside.

It is not known yet whether the appointment of Gupta would be a source of tension in the ministry, especially because the minister of state, under an arrangement between the prime minister and AIADMKsupremo J Jayalalitha, is supposed to have independently overseeing the functioning of the departments of banking, insurance and revenue. UTI’s Trustee P J Nayak is likely to succeed Gupta as the chairman. A former IAS officer, Nayak is a favourite of North Block where he served as a middle level officer before he left the service to join the UTI. Though Nayak is not a favourite in the UTI hierarchy , the finance ministry is reported to be backing him fully.

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At the IDBI headquarters, Khan had a busy day addressing senior executives and launching the IDBI website. Till the time of going to the press Khan was not aware of the developments in the North Block. The Montek-Sinha duo did consider IDBI excecutive directors,S K Chakrabarti, P V Narasimham and P S Subramanyam. Even HDFC chief Deepak Parekh and ICICI managing director K V Kamath were approached for the top slot. However, both of them declined.