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On the day when the government officially announced C B Bhave as the chairman of the Securities and Exchange Board of India, it also announced the successor to him at National Securities Depository Ltd, India's premier depository.
The latter got much smaller news coverage, given the high-profile change of guard at Sebi. But, the appointment of 54-year-old Gagan Rai as CEO and MD at NSDL is no less significant.
"We may have travelled over 800 cities (during the mid-1990s) to create awareness about demateralised (paperless) shares to investors," Rai told this writer in a casual chat.
Bhave, who was always approachable, remained the face of the organisation, whose image took a big knock last year -- for the first time in more than a decade -- when Sebi accused it for failing to notice the fictitious demat account openings by manipulators to corner shares during initial public offerings (IPOs). Rai did not respond to the charges. "No comments. The matter is sub-judice."
However, he did respond to the work being done by NSDL in transforming our capital markets. "The transition to demateralised form of trading from physical format is nothing less than a revolution in our capital markets," says Rai, who left the erstwhile development financial institution, the Industrial Development Bank of India (IDBI), to join NSDL in 1997.
Thanks to NSDL's efforts, about 99 per cent of floating stock on Indian stock market is demateralised, he points out.
"The transaction cost in India is one of the lowest in the world. But, we have never gone to town with our achievements," says Rai, whose NSDL has just won yet another contract from the government, this time to become the central record keeper for the proposed pension scheme for central and state government employees, who joined the service after January 2004.
"The Central Record Agency will be a big challenge," he admits. As many as 17 state governments have adopted the contributory pension systems for new employees who will participate in the new pension scheme.
Around 500,000 employees have joined the state and federal government service after January 2004 -- surely, a big task for NSDL under Rai. Rai says NSDL's 300-member "lean and mean" employee base drives the organisation to meet big challenges.
While most organisations face huge amount of employee churning, thanks to the booming economy and the entry of several foreign players in the financial services space, NSDL faces low employee churn. "The big challenges drive our employees, and this I presume, is helping us from attrition".
The work done for the government on Tax Information Network (TIN), a repository of nationwide tax-related information, established by NSDL on behalf of the Income Tax department is another "revolution" being created by the organisation, he says.
Simply put, this will eliminate, over a period of time, the tax deducted at source (TDS) certificates which employees get from their employers and other revenue sources. "Over a period, we will get to know the TDS from various sources from one point," he explains.
Rai, who is as tall as Bhave at 5 feet 11 inches, has always been under his shadow, though he has been with NSDL since its inception 11 years ago. Only time will prove if he can grow as tall as Bhave in stature.
