The Great Banking Divide

Though they work minutes from each other and share the same fancy designations, the private and professional lives of India’s top public and foreign bankers couldn’t be further apart. Your quintessential foreign bank chief takes home an astonishing $ one million (Rs 4.8 crore) every year — perks not included of course. The chairman of the SBI, the country’s largest bank which accounts for nearly a quarter of the country’s deposits and loans, and manages assets of some Rs 350,000 crore gets Rs 30,000 a month (before taxes).

The largest foreign bank in India, Standard Chartered, has less than a three percent market share. Of course it’s only fair to point out that multinational banks run their balance sheets with an ease a state-run behemoth can only dream of.

Employees of the country’s ponderous public banks have been so distressed by their poorly-paid bosses that, over the years, they have often demanded that their chairmen get more moolah. “That’s probably because they wanted higher salaries themselves,” says Dalbir Singh, chairman of the Central Bank of India and head of the Indian Banks’ Association.

The Death of the Braggart

Bankers often joke about the Great Divide. At a recent meeting one speaker, the head of a consulting firm in Mumbai, said it was sometimes difficult to tell the difference between the salary slip of a driver and a state-run bank chairman. There have been occasions when the former takes home more money, he said.

Of course any top government job comes with a generous slice of perks. In this case, a big bungalow or an airy flat in South Mumbai, a personal staff of at least five, a fleet of white Ambassadors (or Esteems) at your disposal. “When I was chairman I used to carry just about a hundred rupees in my wallet, and I rarely spent it,” says Dipankar Basu, former SBI chief.

But Basu often found his finances stretched during his wife’s bi-annual visit by rail to her childhood home in Allahabad. “Those trips always strained my bank balance,” he discloses frankly. As chairman, in those days he took home around Rs 8,000 every month.

Use the word lifestyle with a foreign or private banker though, and you can almost hear them squirm. The easily-accessible (usually) chaps you see smiling at you from the covers of business magazines every month, suddenly freeze over.

Nowadays, even the most flamboyant foreign banker is reluctant to show off any personal wealth. That’s probably because in the last four years banks have invariably picked the quiet over-achievers over the bright braggart for those coveted top posts. One bank chief said he would love to meet, but not to discuss anyone’s lifestyle. “The topic does not interest me.”

Luckily, it’s a subject that interests all those bankers who work with them, whose only dream is to make it like their bosses have. After all, being the head of an international bank in India has big-time benefits. One banker in his mid-30s put it succinctly: “The money is humunguous.”

By the time he was in his third year as a chartered accountant, he was already earning more than his father who headed a big state-run bank. And that’s another thing. The kids of state-run bankers rarely walk down the same road. “Youngsters today are in a great hurry to go up the ladder,” says Central Bank’s Singh.

Besides, who wants to wait seven years before you can climb one more step up to the next cadre? So most foreign banks are littered with the children of top government bankers.

It’s a lavish life. The foreign banker’s standard-issue car is a S Class Mercedes or a Jaguar. The house is most often a centrally air-conditioned four bedroom (or more) duplex in the poshest building of Malabar Hill with a monthly rent of up to Rs 5.5 lakh. He’s a born negotiator who networks his way through weekend golf games, after-work drinks at the exclusive Belvedere in The Oberoi, and lavish parties. He holidays in the South of France or at an exclusive spa in Italy, suits up in Versace topped with Hermes and usually signs on the dotted line with a Mont Blanc. Sometimes, like ANZ Grindlays’ former country head Anuroop Singh, he even has a snooker table in his office.

It’s Not Just The Money

It’s really not.The job descriptions are dramatically different too. Foreign banks focus on consumer banking, wealth management and treasury services. The local bank often functions haphazardly, mostly because it’s being pulled along in too many different directions.

“Their paternity is always uncertain. Most times, the banks are not even given a chance by all the different lobbies that want to run them,” says the head of a consulting firm.

Let’s just take cell phone calls. The private banker is probably getting calls from his boss asking why his ROE (return on employee) has slipped, while the state-run bank chief is continuously being asked to transfer-so-and-so, or to loan money to so-and-so or to organise the bank’s guest house for so-and-so.

The state-run banker doesn’t network in the conventional sense of the word. He’s a grassroots man.

Like K Kannan, former chairman of the Bank of Baroda. We meet at his apartment in Central Mumbai. The building doesn’t have a lift and the TV is fourteen inches. His speciality has always been micro-credit.

So Kannan spent his time at the bank figuring out how to finance cobblers in the red-light district of Kamathipura or giving export credit to successful start-ups like Lijjat Papad. He helped set up the Annapurna scheme, which gave local homemakers the money to purchase tiffin boxes and supply food to out-of-town mill workers.

“I know the small borrower better than the big guy. Retail to him means a cycle loan and not a car loan,” says Kannan, who is still in touch with all his branches.

“No, no I visited on Saturday. The carpet is not okay, have it cleaned,” he tells a branch manager who calls him during this interview.