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Damodaran new UTI chief

Our Bureau

NEW DELHI, July 15

THE Government today appointed Mr M. Damodaran, an IAS officer who is now Officer on Special Duty in the Reserve Bank of India, New Delhi, as the new Chairman of Unit Trust of India.

Mr Damodaran, whose appointment is for one year, left for Mumbai to take part in today's board meeting, shortly after the appointment was cleared on Sunday morning. The decision to appoint Mr Damodaran was taken by the Government over a week ago. Conside ring the state of affairs in UTI, it was imperative that a new Chairman was in place swiftly, a senior Government official said.

Therefore, the Government had to shelve the earlier proposal to constitute a search committee to identify the right candidate for one of the top jobs in the domestic financial sector. The limited one-year tenure for Mr Damodaran could be attributed to th e fact that he would be there basically to ensure the transition of the Trust into a corporatised entity.

A choice of a civil service officer to head UTI could help the Government in this regard, it is reckoned, as piloting changes for transforming UTI into functioning like any other mutual fund would then be far more easier. Another reason for the appointme nt is that the Finance Ministry had come under fire for not having a nominee on the board of trustees of UTI, after the 1999 bail-out involving an infusion of Rs 3,300 crore.

The logic for the new appointment is that if the Government is to carry the can for the decisions of the institution, without a nominee on board, it would be prudent to have a civil service officer.

The Finance Minister, Mr Yashwant Sinha, had said last week that the Government was considering restoring the practice of appointing a nominee from the Government on the UTI board. The Finance Ministry had stopped nominating one of its senior officers to the UTI board in 1997.

However, the appointment of an IAS officer to head UTI is certain to draw flak, analysts reckon.

Mr Damodaran, an officer from the 1971 batch of the IAS and belonging to the Tripura-Manipur cadre, worked as Joint Secretary in the Banking Division of the Finance Ministry for four years. He also headed the Indian Bank for a short while prior to the ap pointment of Mrs Ranjana Kumar as the CMD of that bank.

At the RBI, he was in charge of the weak banks.

Picture :A tough challenge : The new UTI Chairman, Mr M. Damodaran, addressing newspersons in Mumbai on Sunday.

Picture by : Shashi Ashiwal