Ever-smiling, consciously low profile, and unfailingly polite, it is easy to mistake her for a family matriarch rather than a doyenne of high finance in India
Shyamala Gopinath, Chairperson, Seac, bank licences
Reserve Bank of India (RBI) Governor Shaktikanta Das defiantly said recently that India has no choice but to accumulate reserves to safeguard against currency market volatility in a taper tantrum-like event. One little appreciated statistic is that such currency market volatility revisits India in a cycle of every five years, more or less, making former governor D Subbarao joke that one has not qualified as a governor if he hasn’t faced a currency crisis in his tenure.
In every crisis, though, India emerged relatively unscathed thanks to the ingenious central bankers working behind the scenes. One such stellar central banker is former deputy governor Shyamala Gopinath. Ever-smiling, consciously low profile, and unfailingly polite, it is easy to mistake her for a family matriarch rather than a doyenne of high finance in India. She is one of the few people who is considered “highly competent” in nearly all aspects of central banking — regulation and supervision, development of financial markets, capital account management, management of government borrowings, forex reserves management and payment and settlement system. She is most respected, though, for keeping markets and the banking system going seamlessly even during the worst of crises.
Gopinath was one of the few senior officials on whom governors Bimal Jalan, Y V Reddy and Subbarao depended heavily when there was a crisis. As a chief general manager in the late 1990s and early 2000s, and later executive director and deputy governor, she was legendary for her meticulous policies, often crafted with surgical precision. Analysts unequivocally give credit to the combination of Gopinath, Usha Thorat, Rakesh Mohan and V Leeladhar as deputy governors under Governor Reddy for ring-fencing India from the global credit crisis.
It is fitting, therefore, that the RBI has again sought Gopinath’s help in determining who should get the opportunity to run a banking business in India, by naming her chairperson of the standing external advisory committee (SEAC) for evaluating applications for universal banks as well as small finance banks.
Gopinath topped the RBI entrance exam for officers in 1972 and rose through the ranks. She first came into focus during 1991 when investors withdrew dollars from emerging markets in Asia, but Indian Oil Corporation (IOC) came knocking at the doors demanding dollars to meet its financial obligations.
The RBI did not have enough dollars, and the responsibility fell on Gopinath to handle the crisis. She would later recall that that was her most challenging assignment in RBI. She froze the dollars of the State Bank of India (SBI) to pay IOC and gave the bank rupee funds instead.
Soon after, the RBI decided the country must have enough foreign exchange reserves to cover at least a few months’ imports. India stopped depending on short-term flows and started building up reserves. Gopinath was one of the key members of the team responsible for doing so.
From 1997 onwards, the RBI decided to take reserves to a substantially higher level, and in 2000-01, the official policy taken was to have 12 months’ import cover. Reserves zoomed from $42 billion in 2000 to nearly $315 billion by June 2008, just before the credit crisis unfolded.
During the Kargil war in 1999, Gopinath ensured that the financial system remains well lubricated with liquidity. Both during the Lehman crisis in September 2008 and Mumbai terrorist attacks two months later, Subbarao banked on Gopinath to keep the financial markets going.
There was a mild controversy, though, when she was named director of the National Stock Exchange (NSE) in 2012 after she retired from the RBI in 2011. Gopinath had inaugurated the currency bourses of NSE and four other exchanges. NSE later lost a case for offering currency trades free of cost, forcing the other bourses to bear heavy losses. Gopinath, as deputy governor of RBI, did not intervene to prevent NSE from such uncompetitive practices.
Her worst critics, however, do not blame her for any wrongdoing in anything she has undertaken. No wonder, then, that she is on many boards, including non-executive chair of HDFC Bank, a position she will soon have to vacate.
Gopinath was associated with the RBI for nearly four decades, and in her unassuming manner, she did not take credit for breaking the glass ceiling. “I don’t think a glass ceiling operates for the Governor (of the RBI) or for that matter, for any of its officers. At the RBI, all officers are treated as officers and not as women or men. I am an RBI officer like any other. Because of one’s gender, one would not be able to climb up the ladder here,” Gopinath told PTI in her last interview as the RBI deputy governor, a day before her retirement on June 19, 2011.