Disinvestment deals should be free from investigative scanner: Naina Lal Kidwai

Leading Indian banker speaks with Kailashnath Adhikari, MD, Governance Now

GN Bureau | February 21, 2022


#economy   #banking   #disinvestment   #Naina Lal Kidwai   #finance  


The government needs to do to its disinvestment deals in a transparent and above-board manner and ensure that deals are free from the investigative scanner, well-known banker and chartered accountant Naina Lal Kidwai has said.

Giving her views on the private sector's response to the disinvestment programme, Kidwai said the deal has to be crafted in a way that makes sense, as not every deal will get bids from two or three bidders, to show that it has gone to the highest bidder.           

“Government follows a very regimented process. We have seen deals getting reopened for CBI and other inquiries. Disinvestment deals should be free from the investigative scanner. The government has to have the courage to transact and do deals with full transparency.”

She was in a conversation with Kailashnath Adhikari, MD, Governance Now, during a webcast as part of the Visionary Talk series held by the public policy and governance analysis platform.
 
Watch the video:



The former group general manager and country head of HSBC India said that not all deals will easily have two or three bidders to transparently show that it has gone to the highest bidder.

“There will be bells and whistles around each deal… When you do M&A deals it is very hard to do cookie-cutter deals… and when you do it in an environment where you can come back 15 years later to revisit it and throw someone in jail... it’s not going to help. We have to have courage when we do these deals. We have to do them in an above-board way and also ensure that those who sign those files get some protection from such revisiting; otherwise these deals are going to go round in circles.”

With the LIC’s public issue expected to add fuel to the disinvestment programme and on being asked if a behemoth like LIC should really go public, the business executive said with a huge market share despite the coming in of the private sector, LIC has maintained their share remarkably well. The public offering she said is the right way to go “…while the government will continue its ownership, it brings money into the kitty at a time when we need it the most. We have had extraordinary pandemic costs… we still need to invest… we still need to commit to and contain fiscal deficit and the big plug figure is going to be the LIC IPO. While these deals are not easy in a very volatile equity market but the IPO will close a huge money gap that can be very well used,” she said.

On structural reforms in the Indian banking system, she said she hoped the government would move forward on its announced policy, on some public sector banks at least, into the private sector. Kidwai said having a large preponderance of ownership of banks in government hands is not required.

“Whether the government does that through fewer banks which is the right strategy or enable other banks to grow, move to ensure a much distributed banking sector will be important. Right now the banking sector is under capacity for the growth the country must-see and for that we need larger and more banks and banks that fill all the spaces. Each of the financial institutions other than the banks is important,” she said.

Kidwai said that India needs a far more robust capital market for debts and bonds so companies can move very rapidly from being banked by the banks through the capital markets. Though there is some move by the government to do so, a proper bond market will ensure that companies don’t rely only on the banking sector but move to bonds and capital markets. She added that longer tenure bonds up to 20 years will provide stability to companies and also take off pressure from the banking system.

“The financial services sector has to be looked at together in a way that takes the pressure off banks; give us more banks in the private sector as well as a robust banking system.”

Kidwai also said that IPO pricing should be more responsible and retail investors need more awareness and education on investing and have the right understanding of entry and exit strategy for the company.

Comments

 

Other News

GST revenue in May clocks 12% y-o-y growth

The gross Good & Services Tax (GST) revenue collected in the month of May, 2023 is ₹1,57,090 crore of which CGST is ₹28,411 crore, SGST is ₹35,828 crore, IGST is ₹81,363 crore (including ₹41,772 crore collected on import of goods) and cess is ₹11,489 crore (including ₹1,057 crore collecte

Need local solutions to climate change: P Velrasu of BMC

Climate change rising temperature and sea levels are posing new risks for coastal cities. With population growth rate of 1%- 2% in India every year, Mumbai too is growing and is population will double from 20 million to 40 million in the coming years. The city is also at the risk of rising sea level. It ne

Civil Services 2022 Top 20 felicitated

Union Minister of State (Independent Charge) for Science and Technology, MoS PMO, Department of Atomic Energy and Department of Space and MoS Personnel, Public Grievances and Pensions, Dr Jitendra Singh on Tuesday interacted with and felicitated the first 20 All India Toppers of IAS/ Civil Services Exam 20

Boost to offshore wind energy projects

In a major decision, the Government has decided to grant waiver of ISTS charges to Off-Shore Wind Projects and extend the waiver to Green Hydrogen/Green Ammonia. This decision has been taken to facilitate wider execution of offshore wind energy initiatives, to promote the expansion of Green Hydrogen / Gree

Duty of stakeholders to provide cost effective, alternate energy fuels: Gadkari

Urging use of alternative and cost effective fuels to reduce pollution caused by vehicles, union road transport and highways minister Nitin Gadkari on Thursday said finding cost-effective fuels is the need of the hour and underlined that use of fuels like bio-CNG and green hydrogen help in protecting the e

Record production of rice, wheat, and sugarcane estimated

The foodgrain production of 3305.34 lakh tonnes is estimated in the current agricultural year 2022-23 – higher by 149.18 LMT as compared to the previous year, according to the Third Advance Estimates of production of major crops released by the ministry of agriculture and farmers welfare.

Visionary Talk: Amitabh Gupta, Pune Police Commissioner with Kailashnath Adhikari, MD, Governance Now


Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter