How does the current economic situation in Europe impact emerging markets? What is your outlook for the Euro zone?

SEETHARAMAN: It’s going to have a significant impact. We are insulted in terms of macro-economics. Qatar has been a growth story over the years, a sustainable journey, and we've had double-digit growth for the last three years. We are going to have a soft landing of 6% growth next year (2012). So we are insulated in terms of macroeconomic fundamentals but we are not isolated from the global crisis and that’s the definition of the issue. The world is fragile. The financial economies are converting as real; the real economies are rarely finding their scope and performance. There is a new world order evolving. Europe, by design, is an error and by birth a deformity. You cannot have centralized monetary policy without having a centralized fiscal union. That is the definition of the EC. It is going to take a while to have political and economic convergence to achieve the larger values. The sustainable journey is not without a fiscal union, or issuing Euro bonds. The big and small players, the rich and poor countries, have to come together in line with the overall value advantage. The Maastricht Treaty has set a mission for 27 countries. 17 countries have gotten into the currency. Now, there’s a possibility of a break-up if you’re not bringing in political union, fiscal union. The destiny is intertwined and it is going to shake the world, visibly. The European Stabilization Mechanism is not sufficient to support the overall excess of gross debt over GDP. It runs in trillions, whereas now, you’re scrambling on billions. That’s not going to be sufficient. The IMF doesn't have the resources to fund it. The countries which are emerging to be stronger, such as China, can fund it to a limited scale. You have to look at the larger value propositions, bringing in the intertwined political destiny and making sure fiscal union comes in. Otherwise, this is transcending borders. It’s impacting the real economies, the commodity economies like in the Gulf. We have felt the impact on the financial market; the stock market, the bond market, or the rest of the financial segment.

We’ll have a huge impact in the coming days from the developed world to the developing world. We’ll have fragility in the whole framework, that’s why the G8 has become the G20. They have to set in universal standards to see how the global governance comes in, with a larger value to the cross-welfare of the entire mass. So conceptually, there is a reorganization of the global map. Europe is now getting infected. It was the US to start with. The US is recovering but not in a good momentum. Now, Europe is in trouble. The next turn could be the emerging markets as well. In my opinion, the world will be fragile for the next 3 or 4 years. You will have volatility in every single market. Commodity markets are intertwined. Currency markets are a gamble. There is pure corruption in the whole governance framework and currencies are manipulated. Currency wars create trade wars. So there is a tremendous amount of imbalance in global growth and global governance that needs to be fixed. It’s going to be not less than 3, 4, or 5 years to make sure we set in governance to bring in uniformity in terms of politics and economics, the convergence of politics and economics, and setting standards, which are global and that will bring in long term value advantage to all the human prospects.

Doha Bank has been waiting for a license to operate in India since 2005. When do you expect the license to be granted and operations to begin?

SEETHARAMAN: Conceptually, the bilateral relationship between Qatar and India has been a very strong one. Wherever Qatar has an economic linkage, Doha Bank has a profound mission of setting up a commercial gateway, whether its trade, investments, banking, or finance. That’s precisely the reason why we've identified India as a destination. The bilateral trade to date is on an upward trend and is over $7bn. Qatar is also investing in manufacturing as well as other specified verticals. Doha Bank has got a bigger opportunity in terms of bridging the gap to promote the bilateral values. It’s not only Qatar. If you look at all the Gulf States, they have very strong linkages with India; human capital investments, proximity, and there is a huge amount of remittance from the expatriates, Indians living in the Gulf States. In terms of business modeling we can add from the wholesale side, the treasury side, and we can also support the retail side. We have a convergence of banking and technology. India being a big country, we can promote e-commerce in bilateral terms. Trade is a bigger opportunity in which we are accomplishing good business deals. Indian corporates who are engaged in the Gulf States for construction or other activities, we are supporting them, whether it is the Tatas or Shapoorji Pallonji. We also in the coming days foresee a bigger opportunity to invest in terms of small and medium enterprises. India is focusing on wealth distribution as well as employment. The opportunity, in terms of the economic advantage for both the countries being synergistic, is visible for us and we are going to press for the license. I had the privilege of accompanying His Highness way back in April 2005. We submitted our applications. The Reserve Bank of India has asked us to resubmit. They were insisting on reciprocity. Two of the Indian banks are now housed in the Qatar Financial Center; State Bank of India as well as ICICI. We should be in a position to press upon our opportunity as well so that we can add a commercial advantage to both India as well as Qatar.

What areas of operations present the most opportunity for Doha Bank in the Indian market?

SEETHARAMAN: India is an emerging economy. They have sustainable performance in terms of economic growth. We have seen that 6-7% growth is definitely possible in the coming years. The business has to be in terms of corporate lending. Corporate lending in terms of working capital finance, term-loans, and again, project specifics, such as public-private partnerships, where we can lend. In terms of retail, it has to be electronic commerce because India is a big country. Treasury side, we can add financing. In terms of remittances, a lot can go from the Gulf States. We can integrate the customer information and we can do online remittances. Nearly 10,000 crores of rupees ($1.89bn) have been remitted by Doha Bank channels, whether it is Dubai, or Kuwait, or Qatar. We expect this to go up further. In terms of investments, Qatar is planning to invest and the rest of the Gulf States are also looking for opportunities to invest in India. We would also be looking at the project space where we can be an advisory as well as support the infrastructure growth momentum in India. So there are multiple angles that we can look at objectively and see how to promote overall banking and finance.

What other international markets are most interesting for Doha Bank?

SEETHARAMAN: We have emerging markets in our eyes because in terms of global growth, as you can clearly see, incremental consumption is coming from emerging markets. Developed economies are going through an extraordinary downturn. We have economic linkages with the emerging markets, wherever Qatar and the Gulf States have linkages. The single largest partnership for Qatar is Japan. We have an office there. The second largest one is South Korea and we have an office in Seoul. Singapore is the third largest one and we also have an office there. In the UK we have representation and in Turkey as well. We are looking at other options within the intra-GCC and across the globe, whether it is Southeast Asia or markets such as Brazil and Canada. We are not ruling anything out if there is financial stability. Qatar and the Gulf States can provide multiple opportunities in terms of bilateral trade and investments in banking.

The Qatar Credit Bureau recently started operations. What impact has the Credit Bureau has to date on risk management?

SEETHARAMAN: Banking is all about enterprise risk integration. Conceptually, the credit information is vital for us to see the quality of the customer. Whether wholesale or retail, we need to understand the credibility of the customer. That’s what a credit bureau provides you. It provides the standing of the customer from the centralized information net. Whether he is banking with you or not, you have credible information as to his identity, his enterprise net-worth, the collateral which he has offered to procure, loans and advances, and also any cross-border exposure. This is important information which we need to interpret before we assess the character and capacity of the customer. That’s very useful. Before it was not there and now we have this tool and we can bring in quality credit in the coming days.

What else can be implemented to improve lending transparency?

SEETHARAMAN: Transparency and governance are an integral part of the banking perspective. Better banks should establish global benchmarks in terms of governance; setting the standards in terms of board structure, bringing in non-executive directors and bringing in professionals who are exposed to industry verticals. We are also consciously disseminating information which is useful for global investors, whether it is private equity, hedge fund holders, ratings agencies, or banking analysts and investment banks. That is part and parcel of the transparency maker. Conceptually, we also have to recognize, with the changing face of the world and the changing face of financial service, the cross-border risk is visibly looming. No local bank can be local; it is global. No bank can be private; it is public because we play with public deposits. We need to set standards which are universal, universal accounting standards, valuations, securitization. Those are standards which are very important in order for us to have a sustainable journey. That’s what Doha Bank has managed to achieve. Whether it’s a boom or a downturn, our graph has always been ascending.