Specialist in Indian Banking and Economic Research

Hemindra Hazari

Is a Securities & Exchange Board of India (SEBI) registered research analyst with over 25 years experience in the Indian capital markets with a specialization in banking and economy research and has managerial experience of establishing profitable equities business, leading and mentoring analysts.  He has worked with prominent foreign and domestic capital market firms such as UBS, Societe Generale, HSBC, ASK Raymond James  and Karvy Stock  Broking and is a regular guest on business media channels and is respected for his non-consensus view on stocks and the market.

Yes Men at Yes Bank, and Elsewhere: ‘Phone Banking’ in the Private Sector

Will IndusInd’s Reorganisation of Corporate Lending Trigger Another Round of Whistleblowing?

CG Power Loan Scandal: IndusInd Bank Pioneers Lending Without Documents to a Firm with No Assets

IndusInd Bank: Steady Performance, Business Outlook Improving

IndusInd Bank – Now Dealing With Negative Operating Jaws

Most private sector banks withhold the remuneration details of senior executives in the annual reports. However, shareholders can specifically request this <a href="https://www.mca.gov.in/Ministry/pdf/NCARules_Chapter13.pdf" target="_blank" rel="noopener">disclosure</a> from companies. The remuneration disclosure provides valuable information on the quantum of monetary compensation, revealing how senior managers have been appraised and compensated. In <a href="https://www.smartkarma.com/entities/indusind-bank-ltd" target="_blank" data-smartkarma-citation="entities:1558:1" rel="noopener">Indusind Bank (IIB IN)</a>, the scale of remuneration reveals how <a href="https://www.indusind.com/iblogs/bloggers/mr-ramaswamy-meyyappan/" target="_blank" rel="noopener">Ramaswamy Meyyappan</a> (Chief Risk Officer) and the corporate credit team (initially led by <a href="https://www.linkedin.com/in/suhailchander/?originalSubdomain=in" target="_blank" rel="noopener">Suhail Chander</a> and subsequently by <a href="https://www.linkedin.com/in/roopa-satish-847139121/?originalSubdomain=in" target="_blank" rel="noopener">Roopa Satish</a>) were handsomely rewarded (FY2017-FY2019) for doing high-risk, poor quality loans to companies like <a href="https://hemindrahazari.com/2021/06/16/cg-power-loan-scandal-indusind-bank-pioneers-lending-without-documents-to-a-firm-with-no-assets/" target="_blank" rel="noopener">CG Middle East</a>   (US$ 40 mn in FY2018; the loan is being  investigated by the Securities and Exchange Board of India),  <a href="https://hemindrahazari.com/2019/04/25/indusind-bank-one-more-disturbing-lapse-of-judgment-by-the-banker-of-the-year/" target="_blank" rel="noopener">Sprit Infrapower</a> (Rs 5 bn loan to unlisted company of founders of Zee media in FY2019) and <a href="https://hemindrahazari.com/2018/10/17/are-indusind-banks-credit-and-risk-departments-run-by-financial-illiterates/" target="_blank" rel="noopener">IL&amp;FS</a>  (Rs 20 bn bridge loan in FY2019). Thereafter their remuneration declined in FY2020, and for some it recovered in FY2021. Indusind Bank has declined to provide any clarity on the reasons for the increase and decrease in individual remuneration. When corporate banking’s credit costs in FY2019 shot up by 4.6x and Profit Before Tax (PBT) of the division declined by 60% to Rs 6.6 bn, Roopa Satish, the Country Head – Corporate, Institutions and Investment Banking, remuneration increased by 16% to Rs 52.3 mn. In FY2020 her remuneration declined by 37% to Rs 32.9 mn.  More importantly, despite the significant financial and reputational loss to the bank from dodgy corporate loans, none of the concerned executives was sacked; the only apparent punishment was a reduction in their already inflated remuneration. These events demonstrate poor oversight by the important sub-committees of the board of directors such as Committee of Directors (CoD), Risk Management and the Nomination and Remuneration (NRC). The coterie, consisting of mainly former ABN AMRO Bank colleagues, are well protected from getting the axe.The lesson to stakeholders is that, when times are good, senior executives will be richly rewarded, and when times turn sour on account of their incompetence and/or complicity, they will still retain their jobs. The only punishment will be a reduction in their remuneration. As long as such individuals are blessed by the CEO, their jobs are secure, and there is negligible accountability for their disastrous acts which result in losses to the bank and to shareholders.

Most private sector banks withhold the remuneration details of senior executives in the annual reports. However, shareholders can specifically request this disclosure from companies. The remuneration disclosure provides valuable information on the quantum of monetary compensation, revealing how senior managers have been appraised and compensated. In Indusind Bank (IIB IN), the scale of remuneration reveals how Ramaswamy Meyyappan (Chief Risk Officer) and the corporate credit team (initially led by Suhail Chander and subsequently by Roopa Satish) were handsomely rewarded (FY2017-FY2019) for doing high-risk, poor quality loans to companies like CG Middle East   (US$ 40 mn in FY2018; the loan is being  investigated by the Securities and Exchange Board of India),  Sprit Infrapower (Rs 5 bn loan to unlisted company of founders of Zee media in FY2019) and IL&amp;FS  (Rs 20 bn bridge loan in FY2019). Thereafter their remuneration declined in FY2020, and for some it recovered in FY2021. Indusind Bank has declined to provide any clarity on the reasons for the increase and decrease in individual remuneration. When corporate banking’s credit costs in FY2019 shot up by 4.6x and Profit Before Tax (PBT) of the division declined by 60% to Rs 6.6 bn, Roopa Satish, the Country Head – Corporate, Institutions and Investment Banking, remuneration increased by 16% to Rs 52.3 mn. In FY2020 her remuneration declined by 37% to Rs 32.9 mn.  More importantly, despite the significant financial and reputational loss to the bank from dodgy corporate loans, none of the concerned executives was sacked; the only apparent punishment was a reduction in their already inflated remuneration. These events demonstrate poor oversight by the important sub-committees of the board of directors such as Committee of Directors (CoD), Risk Management and the Nomination and Remuneration (NRC). The coterie, consisting of mainly former ABN AMRO Bank colleagues, are well protected from getting the axe.The lesson to stakeholders is that, when times are good, senior executives will be richly rewarded, and when times turn sour on account of their incompetence and/or complicity, they will still retain their jobs. The only punishment will be a reduction in their remuneration. As long as such individuals are blessed by the CEO, their jobs are secure, and there is negligible accountability for their disastrous acts which result in losses to the bank and to shareholders.

CEO’s Coterie: IndusInd’s High Flying High Risk Takers Reap Rich Rewards But Negligible Penalties