Friday, February 03, 2012

SKS Microfinance appoints Verghese Jacob (79BMD) as Ombudsperson

From Business Today

SKS Microfinance, the country's only listed mirofinance entity, announced on Wednesday that it has appointed Verghese Jacob as its ombudsman, making SKS arguably the only Indian NBFC-MFI (non banking microfinance company- microfinance institution) to have such a structure in place for customer protection and grievance redressal.

Verghese Jacob, who has had long years of experience in the corporate and social sectors, is also the Chief Integrator (the preferred designation for the CEO) at Byrraju Foundation, set up by the Satyam Computer's erstwhile promoter family of Rajus. Verghese Jacob, SKS says, has over 30 years of experience spanning the corporate and social sectors. In the corporate world he has held senior executive and board level positions with groups like the Godrej, IBS, ACCEL and KVK. It also says the 57-year-old MBA from XLRI, Jamshedpur is also a Six Sigma Black Belt.

Interestingly, this announcement comes close on the heels of the company getting its shareholder and the Reserve Bank of India approval for raising the investment limit of foreign institutional investors in the company to 74 per cent from 24 per cent. It is currently at 15 per cent but post its QIP, it is expected to touch 45 per cent.

People from the sector have welcomed the move to have an ombudsman though some are not sure if this move is any way linked to the plan to have an increased FII holding where in it would technically become a largely foreign-owned company. The company however sees this as an effort aimed at heralding a new era in institutionalising customer protection and grievance redressal in the Indian microfinance industry.

"The appointment of Verghese Jacob as our ombudsman showcases SKS Microfinance Limited's commitment to continue its pioneering customer protection and grievance redressal initiatives including its toll-free Helpline (1800 300 10000) in eight Indian languages, constant vigil on process, system and regulatory compliance and customer awareness programmes over the years," says MR Rao, managing director & chief executive officer, SKS Microfinance Limited. He says, "Verghese will help us set new benchmarks of excellence in customer protection and grievance redressal."

Verghese Jacob,already sees work cut out for himself. Talking to BT, he says: "The plan is to have a team in place for this but right now the focus in not just on attending to customer protection and grievance redressal but also on the internal processes that are in tune with the needs of the RBI guidelines." For example, looking at whether the transaction process with customers is robust enough to ensure the guidelines are not violated.

"It certainly is an excellent idea,'' says Sanjay Sinha, managing director, Micro-credit Ratings International Limited (M-CRIL), which is involved in financial rating of microfinance institutions and in sectoral advisory services.

He however has a piece of advice for MFIs: "It is important to keep in mind that it is not just respected people that would be needed in such roles but also those who understand the sector and it nuances.'' How this will be handled at SKS will be closely watched given the company operates across 19 states of India - Andhra Pradesh, Karnataka, Maharashtra, Orissa, Madhya Pradesh, Bihar, Uttar Pradesh, Rajasthan, Uttaranchal, Himachal Pradesh, Haryana, West Bengal, Jharkhand, Chhattisgarh, Gujarat, Kerala, Tamil Nadu, Punjab and Delhi.

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