It is my honour and privilege to edit for you the world’s most iconic brand in business journalism. As we navigate Fortune India into a vibrant, buzzing ‘Digital First’ avatar over the coming months, I promise you incisive, thoughtful, and cutting-edge coverage from the world of business and economy from some of the finest writers—not just in print but 24x7 in multiple digital formats.
It is only apt then that we begin this insightful journey with this issue’s cover story on a silent battle going on in the industry that is pivotal to Prime Minister Narendra Modi’s target of making India a $5-trillion economy by 2024—the banking sector. It needs to provide all the capital to make that dream come true. Especially private sector banks, which are not just more efficient and least NPA-laden but are even adding capital—thus contributing to economic expansion—at a rate faster than public sector banks. Top private banks and their CEOs need to be in ship-shape to deliver on the India growth story.
But they are not. They are unsure and edgy. There is considerable unease in corner rooms ever since the Reserve Bank of India began tightening the screws on governance—and CEO tenure. This can’t be held against the RBI. After all, it has suffered blowbacks from misdemeanours at ICICI Bank, YES Bank. On top of that, failure of banks and finance firms such as Punjab and Maharashtra Co-operative Bank, Infrastructure Leasing & Financial Services, Dewan Housing Finance Corporation, among others, painted a sorry picture of the banking regulator. The RBI believes boards and its committees get over-awed by long-standing CEOs. They stop asking tough questions from the CEO. Hence, their tenure must be limited. Importantly, as long as they are CEOs, their powers must have oversight of independent committees. CEOs see in this a great conspiracy to undermine their authority. But they are in a losing battle. In a fight with the boss, there can only be one winner—the boss.
But this tussle comes at an inopportune moment. Bank CEOs are on tenterhooks over RBI’s governance code at a time when banks are hit by worsening asset quality due to the pandemic. By 2023, almost all longterm private bank chiefs will be forced to bid adieu. Lack of visibility over tenures has caused embarrassment to incumbents and boards even as big institutional investors seek clarity on succession plans. Our cover story this issue takes you inside this silent battle—and its implications.
The second cover answers the question that is on every investor’s mind: Is the stock market rally for good? More importantly, what to do if stock markets correct—or crash.
In the latter half of the magazine, our special issue package this month focusses on sustainability, an area that is pregnant with excitement after India’s two richest men Mukesh Ambani and Gautam Adani have announced massive multi-billion dollar investments in green projects.
But of all the stories in this issue, you may not like to miss the N.R. Narayana Murthy interview on how to run sustainable and ethical organisations.
May I welcome you to Fortune India’s new digital journey!
(This editorial originally appeared in Fortune India's August 2021 issue).