Leadership in banking calls for impeccable credits

Venkat Raman – 

venkat@indiannewslink.co.nz

In pursuing its role as the Central Bank determining the country’s monetary policy, official cash rate, and ensuring that the financial system remains stable, the Reserve Bank of New Zealand follows a ‘Three-Pillar Approach,’ which has earned the admiration of its counterparts elsewhere.

Trilogy of Discipline

The trinity of factors that drive the approach of the Reserve Bank of New Zealand accounts for Self-Discipline, Market Discipline and Regulatory Discipline.

These disciplines also cover the appointment of independent directors and Chairpersons  of registered commercial banks in the country. RBNZ expects all banks operating in the country to ensure that their boards of directors are people of unimpeachable character and integrity and comply with rules in force.

While the process of registering banks is rigid and rigorous, the approval of applications for appointment of directors and chairpersons of banks is equally tough. Thus, the appointment of Wenceslaus Anthony as the Chairman of Bank of Baroda (NZ) Limited was also subject to stringent scrutiny and hence reflects the calibre of the incumbent. The Bank’s first independent local Chairman Dr Rajen Prasad is also known for his high level of integrity, honesty and experience in high public offices.

RBNZ expects those in charge of commercial banks to safe-guard not only depositors and other customers, but also ensure that their institution plays its part in keeping the financial system safe.

Weathering crisis

RBNZ believes that although New Zealand banks, including the ‘Big Four’ and their Australian parents, weathered the global financial crisis reasonably well in comparison to many of their foreign counterparts, they had become heavily dependent on international wholesale lending markets for their funding.

And with a high proportion of that funding borrowed on a short term basis, the drying up of wholesale funding soon began to affect them.

The Reserve Bank and government intervened swiftly with various measures to support system liquidity and confidence.

Mr Anthony would have the unenviable task of steering the destiny of Bank of Baroda (NZ) Limited with the best risk management practices in place.

New Growth Land

S S Mundra, a former Bank of Baroda Chairman described New Zealand as a ‘Ring-fenced banking centre,’ saying that RBNZ follows the best banking practices, aimed at keeping the monetary system and the economy healthy.

“We consider this country as ‘New Growth Land’ for Bank of Baroda. We have come here to stay and hence we look for gradual and steady growth. I am happy that the bank has made good progress within a short span of three years,” he said speaking to guests at a dinner reception in Auckland on November 25, 2013 (Indian Newslink, December 1, 2013).

With three branches, one each in Central Auckland, South Auckland and Wellington, Bank of Baroda New Zealand is well-positioned to serve its customers.

Its major challenge is to develop products and services that suit the needs of New Zealanders.

The Challenges

Dr Anil Kumar Khandelwal, the then Chairman & Managing Director of Bank of Baroda told us during his visit in May 2007 that the initial response to the establishment of a wholly-owned subsidiary in New Zealand was positive.

“New Zealand has immense potential for Bank of Baroda and we look forward to not only serving the growing Indian community but also other ethnic groups and businesses,” he said (our issue dated March 15, 2007).

The latest results of the Bank in New Zealand, published here in a table format justifies that confidence and anticipation.

Indian Newslink welcomes the appointment of Mr Anthony to the important and strategic post in a growing financial institution and wishes him well. This publication also thanks the Bank’s Managing Director Prahlad Gupta and independent directors Ranjna Patel and Claude Oberto for responding to our invitation to comment on this appointment.

Indian Newslink also thanks the officials of the Bank, advertisers and contributors to this Special Report.

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Photo:

Wenceslaus Anthony (right) with P S Jayakumar, Managing Director & Chief Executive of Bank of Baroda in Mumbai

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