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viralhai · 4 years ago

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Banks should be allowed to exit the NPA crisis, veteran banker KV Kamath told Network 18 | ViralHai News [ad_1]

Kamath said the coronavirus epidemic may have led to a bad debt tsunami, and banks have no option to get out of it.

Former ICICI Bank Chairman KV Kamath said in an interview to Network 18 Group Editor-in-Chief Rahul Joshi on Tuesday that banks in India should fail to grow, making the problem of non-performing assets (NPAs) unbearable Will go.

In the interview, Kamath stated that the coronovirus epidemic may have caused a bad debt tsunami, and banks have no choice but to get out of it.

This, he said, should be done along with other corrective measures such as construction of discretionary buffers, capital injection, and so on. "Whether it is in corporate India, whether it is in rural India or in retail India, I think we need to maintain growth (momentum)," Kamath said.

“If I look at pre-COVIDs, I think there was a problem in the banking sector that was serious. The ICICI Bank veteran said in his interview, but with all efforts — such as with capital injection from the government and so on — it needs to be hand-held, but coming out of it.

The proliferation of coronoviruses and the hit on the resulting businesses will be a serious challenge for the banking industry, no doubt, he said. The second measure for banks, according to Kamath, is the low interest rate regime.

“If the interest rates are 12 percent, then your NPA will double in 6 years. If it doubles in six years, there is no chance for that institution to survive… without massive capital injection, and this capital probably does not exist, "he explained." You need to reduce interest rates. Need to do so that you buy time for the banks to fix it for you. If banks lend at 6 percent, you have 12 years to double the NPA.

While he conceded that interest rates had fallen, Kamath said all stakeholders - government, banks and regulators - would have to ensure low interest rate governance. "Interest rates need to fall even further if banks have to come around without too much pain," he said.

Although Kamath recently praised policy measures like leave on loan repayments for six months, he said that opposing borrowers to repay the loan was very good news for the industry. For those areas which are truly in pain, KVK concluded, a prolonged moratorium should be considered by policy makers.

Edited excerpts from the interview:

Q: Let me turn to the banking sector, obviously the banking sector was struggling with the burden of bad loans even before COVID, do you think this problem could get worse after that, does it worry you The

A: If I look at pre-COVID, I will only amend what you said very little. I think there was a problem in the banking sector, but I think that the banking sector with all the efforts of the government, the capital that was injected and so on is facing problems. When the challenges were coming out, it needed a little more hand-holding. Frankly, the answer to your question is yes, there will be a challenge and the areas where we have challenges are also known. So what is the major response?

The major reactions are at three levels. I have learned this lesson in my last term as a development banker, not in the current stage of how a bank can survive. If you do not allow a bank to grow, then the problem of NPAs is going to be unbearable. Therefore, in addition to reforms like provisions, capital injection, and so on, banks will have to develop their own way to exit the NPA.

Growth is going to be an important part for the banks that emerge from it. So, I think the steps that have been taken will be whether it is in corporate India, whether it is in rural India or whether it is in retail India, I think we need to maintain the pace of development.

The second is currently at low interest rates. Low interest rates are going to be important for the survival of banks and I will explain why? Take a very simple scenario, if interest rates are 12 percent below your NPA rate in 6 years, and there is no chance, then all institutions have no chance if an NPA is without massive capital injection in 6 years Is going to double. So you need to bring down the interest rates so that you buy time to fix the banks for yourself. So you rotate the thing, the bank lends at 6 percent, they have 12 years to double the NPA and obviously you will have at least one if not two economic cycles in this period which will make all boats And banks will be able to return to health. Yes, capital injection will be required, but if you run it in high interest rate delinquency, the order of capital injection will be quite low. So I think banks really need to see how they work with the government, with the regulator to ensure that the low interest rate climate ends.

Saying that interest rates have started to fall, I think if banks are to come without much pain, then interest rates need to fall further. Otherwise, they will probably come around but the extreme pain and money being provided by the various stakeholders is a challenge that is the second part.

The third point I think was that some steps were taken, the postponement was announced by the Reserve Bank of India (RBI) and there was an extension of the postponement; very well done. I feel even more happy when I see bankers walking out or some NBFCs come up and say that an 'X' percentage of my customers took the moratorium, which was 2 months ago, but today the remainder of them Has said that we will pay time; Very good news. So, I think and hope that will continue.

However, having said that, if there are areas that really do have problems, I think this is the right time that policy-makers might consider, again I don't have any prescriptions, but in the long run May consider nature's moratorium, perhaps a one-time moratorium. I have heard other banking leaders talking about it and I will stand by them to say that maybe this is the need of the day and perhaps the lowest cost way in which you will put the banking system back on its feet - less Provide interest rates, one-time moratorium, and a market to develop them and encourage them to grow. I think it makes banking fast on its feet; This is the lesson I have learned going back almost 30 years in my career or more and I think it is still true today. This is something we can consider.

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loyallogic · 6 years ago

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How I Blew My Interview with Amarchand Mangaldas

This article is written by Ramanuj Mukherjee, CEO, iPleaders.

Not understanding what a legal career is all about can be quite costly.

Let me tell you a story of how I blew my interview with erstwhile AMSS (now split into two parts CAM and SAM) which at that time was the biggest law firm in India.

To be fully honest, while I was aware of its pre-eminent position in the legal world as the top most law firm in India, I had also heard some bad stories that made me kind of uneasy about joining this place.

However, when the Day 0 calls came, I did apply for AMSS, apart from Luthra & Luthra and Trilegal. AZB did not come to my campus that year, and while Khaitan also came on Day 0, I didn’t even apply for it. Somehow, I was under the impression that Khaitan isn’t that great a law firm so I skipped the interview. That was of course my ignorance. While in 2010, Khaitan wasn’t quite the giant it is today, it was one of the best. However, the brand had not quite caught up within law schools (shows why law firms should promote themselves in law schools).

I wish I had given the interview, then I would have another story to share.

Trilegal, on the other hand, definitely made the best impression by putting in the extra effort of making a presentation about the firm. It sounded start-uppy, entrepreneurial and a successful meritocracy. When I asked my mentor Shamnad Basheer, who used to teach at NUJS at that time, he also encouraged me to go for Trilegal.

I was leaning towards Trilegal, and also had heard great things about the culture in Luthra & Luthra so that was my 2nd choice. Yes, I know. Many lawyers will beat me up for thinking like that but that’s how I was thinking.

Trilegal was my first interview. I was done in 12 minutes. When I was walking out, I knew I made it. The partners were impressed. They mentioned later to a senior of mine who worked at Trilegal that they thought I had an X factor. When I heard that I gloated over it for at least two weeks.

Well, if you ask me now, X factor or not, everyone has to work their assess off if they go to a law firm. Once I joined the law firm I never felt again that I have any such X factor.

I also cracked the Luthra interview easily. I was not as sure here that I had cracked the interview as I was in the previous one, but I could tell that it went overall positive.

Then finally I had an interview with AMSS. I still remember that the partner who interviewed me was Mr. S.H. Bhojani. Mr. Bhojani is very senior, and he was kind and soft spoken during the interview. He was accompanied by an HR manager who also asked a bunch of questions.

My interview was going quite well. I definitely had the CV to make the cut. I answered some technical questions asked from my CV comfortably. Then, came my first blunder. Mr. Bhojani asked me which team I would like to work with. I said M&A. This was absolutely fine, in hind sight though, Mr. Bhojani was partner in the banking team, having spent many years at ICICI as the legal head. I was of course not very smart on that front, not having googled my interviewer beforehand.

That’s how it is. Blunders do not begin in the room where the interview happens, they usually start taking place much earlier, when you are supposed to prepare.

Anyway, Mr. Bhojani asked me “Why M&A? Why not the banking team?” I actually didn’t have much idea about what kind of work banking teams do. I imagined it must be boring stuff because I generally despise banks. I guess it is because as a kid I had to stand in long SBI queues with my mom too many times.

Even today, I associate bureaucracy and authoritarianism with banks. I would rather get a root canal rather than having to go to a bank. I try to limit my visit to banks to 1 in 10 years.

When I was asked why not the banking team, my inner feelings came out. I did not want to work in the banking team. I said “No, I wouldn’t fancy the banking team.” “Why?” Mr. Bhojani was curious. I was not sure what I should say. I hesitated for a moment and then said “I think banking law would be a lot of paperwork and sort of boring”. Mr. Bhojani was taken aback. He reflected for a moment, looking down at my CV.

Probably he considered if it is still worth continuing a conversation with me or if he should let me go.

Then he said with pity “Well, Ramanuj, all law practice is a lot of boring paperwork. You are in the wrong profession if that is what you are thinking.”

I actually am not sure about his exact words anymore. It has been a good 8 years since this interview. I am quite sure, however, that that’s exactly what he conveyed. And I can totally understand what he meant today.

I had an image of corporate lawyering, despite doing half a dozen law firm internships, that it is glamorous and totally thrilling. Well, that could not be any more untrue. I guess that excitement had built up thanks to reading books like “Predator’s Ball” and ��Big Short”.

Blunder No. 1 – That was a huge blunder. I told the banking partner that banking law was boring and too much paperwork. I want to do something cool. Misplaced priorities but I suppose Mr. Bhojani let it pass.

Anyway, we continued with the interview, and it didn’t look like I was totally rejected. I was then asked several questions by the HR manager. He tried to gauge my interest in life. He asked me where I see myself in 5 years. I gave the standard answer we prepare for such a question. How I was going to become an expert in a certain area of law and then find my feet in the legal industry. It was all made up. Truth be told, I had no idea what I was going to do, and in fact I wanted to be an entrepreneur, so I hid my intentions and gave the textbook answer.

Of course, the HR manager was a smart person. This is what I can say looking back. I actually didn’t bother to ask his name, nor did I make any eye contact, smile or even acknowledge him during the interview. This is also a huge blunder but I would have gotten away with it. The right thing to do, however, was to respectfully acknowledge him and establish rapport.

However, I was not the person back then that I am today. I was focused on the more imposing person, the law firm partner and only cared about impressing that one person. For me, an HR manager was a side actor, not of much relevance. I noticed this happening in the moot courts also. I will make eye contact while speaking only with those who spoke up, had an imposing presence, or seemed threatening. In every other bench there would be someone who doesn’t speak up and keeps listening quietly. I would forget to make eye contact with them, to include them, or to even acknowledge their presence.

That sort of arrogance and ignorance never goes unpunished, one way or the other.

The HR manager deftly took me around some more questions and then sprung the same question again. “I am not very clear what you want to do in the years to come,” he said, “your goals in your formative years are critical”. I grudgingly came up with more things I want to do. More non-authentic bla bla bla.

The HR manager was having none of it. He grilled me again. “What do you really want to do?”

He was so right. He saw through me. You have that sort of superpower when you take hundreds of job interviews.

I didn’t have the courage to tell the truth. On top of that I was young and arrogant. I felt like I was being pressurised. I was not going to take it lying down.

I coldly looked at him and paused for a moment. Then asked “Should I repeat what I just said?” My irritation and arrogance showed through for a moment.

I knew that was it. Just the way I knew I was getting through Trilegal that day, I knew I wasn’t getting through to AMSS. I told myself who cares, I didn’t want to work there anyway.

By evening we found out the offers and began celebrating. I forgot that I made these huge blunders.

What was the last blunder? Was it that I was arrogant? Not really. Yes, it wasn’t the best thing to use my arrogance to hide my inability to answer a very pertinent question, but that wasn’t the real big blunder. My blunder was my fear of showing who I truly am. My inability to say the truth: “Actually, I don’t know what I will do in 5 years. I hope someone can show me the way. I need to find a mentor.”

It takes courage to say things the way you are, especially about your vulnerabilities and weaknesses. However, when we learn to talk about them in a matter of fact way, then our weaknesses turn into our strengths.

Look at this article for example. I am authentically writing about a time I screwed up. Does it make me feel worthless in your eyes? I don’t think so. I have turned a past failure into a useful lesson for you.

We all have wounds, weaknesses, doubts, incompetence, failures and terrible pasts. When we hide them, we become weaker. When we own them, stop hiding, we get stronger.

Blunder No. 2 – being inauthentic, synthetic in an interview, and thinking you are smarter than the interviewer.

Never do it, never.

Hope you learned from my mistakes.

I played a role in making a course around how to ace internships and interviews for big law. Check it out here.

I also created a program that helps lawyers develop powerful profiles that clients and recruiters lap up! Here is a link to the corporate law career development program. It is a one year plan to polish your resume, build a formidable professional network, and deepen your claim to expertise in your field. Check it out!

Do you have any interview blunders to share? Tell me in comments or hit reply. I would love to know more.

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juudgeblog · 6 years ago