Monday, September 22, 2008

L. K. Advani’s dumbing down

BJP’s strongman opts for a face-lift to achieve his ultimate political dream of being India’s PM
The BJP’s parliamentary board, which ratified L.K.Advani’s candidature as the Prime Minister in waiting, is in the throes of another ticklish query: while the party, allies and cadres accept Advani as their supreme leader, will the country, and more specifically Muslims, do the same when the time comes? Therefore, members of the parliamentary board have asked the state BJP chiefs to carry out an internal survey in various states for the consumption of their cadres and other party leaders. The question they have to address: what can be done to reform Advani’s hardline image and steps that need to be taken to improve and liberalise his image.

This operation is to be headed by BJP vice president, Mokhtar Abbas Naqvi. His brief: to find out why Advani, who has a hardline Hindutva image, has been unable to make an impact on the common mass of public in the same way as Sonia Gandhi or Atal Behari Vajpayee. The question rankling the BJP top brass is despite conducting five rath yatras between 1990 and 1997, Advani is not quite considered a man of the masses. At several meetings of the parliamentary board, office bearers have told state chiefs that Advani’s name and public programme, if any in the state, should be given wide publicity. His pronouncements and statements needed to be played up and his entire programmes need to be highlighted well.

But like most leaders who have aspired to lead India, Advani is very keen to undergo an image change, from being a leading Hindutva factionalist to a moderate leader with middle-of-the road views and wide acceptability. The man chosen to conduct this face change is Naqvi, a Shia, who BJP leaders say has acceptability amongst Muslims. According to one strategy being planned, the virulent anti-terrorist rhetoric, at least at Advani’s meetings is going to be tempered down. The meetings, to be uniformly christened as anti-terrorist rallies, will be held throughout the country.

ptullah was first considered for the assignment, but since Naqvi is an old favourite of the Sangh, he got the nod over her. According to the BJP assessment, the fight in the next Lok Sabha is going to be a tough one and in a tight contest, it is important not to acquire the hostility of the Muslims. Even if a small but significant portion of that vote bank moves towards the BJP, the NDA would become a strong contender for the title fight. For the record, the BJP denies anything anything out of the way. “Advani does not need any props. He can win an election on his own,” Naqvi told B&E.

Senior leader and Rajya Sabha member, Arun Jaitley, told B&E: “Advani is our leader and we are going to go to elections under his leadership.” In fact, according to Naqvi, if all goes according to plan, then Advani would have toured all of the 500+ parliamentary constituencies by the end of 2008.

For Complete IIPM Article, Click on IIPM Article

Source :
IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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Saturday, September 20, 2008

Retail revolution

After losing out market share to competitors, India’s PSU bank is slowly becoming a one-stop financial shop. By asif ahmed

One down, six more to go! That’s what O.P. Bhatt, the Chairman of State Bank of India, must have thought as he prepared himself for Herculean task in front of him. On that particular day, he was supposed to interact with the boards of SBI’s six associate banks to consider the biggest merger in the history of Indian banking industry. Of the bank’s seven associates, the merger of the State bank of Saurashtra with the parent bank had already been approved; the remaining would happen soon, thought Bhatt.

But that fateful day never came. Intense opposition from the Left parties that supported the UPA Government at the Centre, and bank trade unions forced Bhatt to never attend the crucial meeting. In fact, the meeting wasn’t held at all, and the proposed merger was indefinitely postponed. However, this is one credit that Bhatt would like more than anything else. This is despite the fact that the SBI chairman has changed the way India’s largest bank interacts with its customers.

How the times have changed for SBI in the past few years. As competition intensified, SBI was hit by falling market share, had to raise funds for expansion, and look for new avenues for growth. For instance, in 2004, the State Bank Group (SBG) accounted for 27.8% of the total banking assets, which fell to 23.3% in 2007. In terms of deposits, while SBG controlled 27.6% of deposits in 2004, the figure shrunk to 23.5% in 2007. But still, Bhatt is thinking in terms of a banking mega merger.

The reason: Bhatt knows that size matters. If SBI can become a banking and financial powerhouse, it will be in a better position to combat private and foreign players. It’s only when it becomes bigger and better will SBI be able to arrest its falling market shares in various categories. Apart from the proposed merger, Bhatt has sought organic growth for SBI in India, and other neighbouring countries. The strategy was unlike that of his predecessor, A.K. Purwar, who believed in acquisitions-related growth.

Under Purwar’s chairmanship, SBI acquired three small banks - Indonesia’s PT Bank IndoMonex, Mauritius-based Indian Ocean International Bank and Kenya’s Giro Commercial Bank. As a part of the overseas-driven strategy, SBI focused on developing foreign market that had substantial Indian population. During his tenure, SBI also made it to the coveted list of Fortune Global 500 list; he made the bank a member of the $1 billion revenues club, and was the first Indian bank to join it.

Bhatt comes from a different school, and thinks differently. According to him, the domestic market still offers immense opportunities to expand, and there are far more critical issues to be dealt with. “Overseas acquisitions can wait,” he said the day he took over as the chairman of SBI. However, Purwar’s legacy still lingers around. For example, during Bhatt’s time, SBI became the first Indian bank to open a fully-fledged branch in China. “Being India’s largest bank, it is only befitting that SBI should be the first to open a branch in mainland China,’’ said Bhatt. But this isn’t a focus area.

Keeping in line with the local mindset, Bhatt expanded the bank’s network in India. He tied up with other banks and institutions to cross-sell banking and financial products. S. K. Mishra, General Manager (Marketing and Cross-Selling Department), State Bank of India, explains, “In the Indian financial markets, mutual funds are rapidly gaining ground among retail investors due to various advantages such as professional management, diversification, and liquidity. For us, the tie-up will open up opportunities to provide our vast client base with a wider choice of products to meet their diverse financial needs and give boost to our fee-based incomes.”

Over the next three years, SBI plans to offer more financial services products like general insurance, custodian services, venture funds, wealth management, and pension-fund management. Given its size, number of branches, and growing customers’ base, it will not be difficult for the bank to woo customers for the new products. At the same time, SBI is the only Indian bank to have got the approval to manage the government’s pension fund. That, in itself, will be a big boon to future revenues and profits.

For Complete IIPM Article, Click on IIPM Article

Source :
IIPM Editorial, 2008

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