In conversation with
Mr Sridhar Nagarajan

"FDI Spotlight: On January 2016, MauBank Ltd was formed following the merge of National Commercial Bank Ltd (NCB) with Mauritius Post and Cooperative Bank Ltd (MPCB). What propelled you to accept this opportunity? Sridhar Nagarajan: The challenge and economic need to stabilize these two banks made me accept the Government’s request. I appreciated the Government’s genuine intent to take two banks that were struggling in the economic climate and making something good and purposeful out of it. I have always been bullish on the future of Mauritius and have opined in many forums local and international that Mauritius will emerge as the number one hub connecting Africa, Middle East and Asia due to its geo-political advantages and business friendly eco-system built over decades, and thus hard to replicate by others in the near future. The MauBank challenge gave me an opportunity to directly participate in the change rather than in mere advocacy. I strongly believe banks’ boards, bankers and their attitudes have contributed to the financial crisis. An agenda of ‘profits now’ being aggressively pursued by the short-term focussed equity investors against the will of long-term oriented institutional investors has impacted decision making at banks over the past two decades culminating in the crisis and ironically being sustained even now across the globe. Banking is a business already established for hundreds of years; its strength lies in its years of accumulated experience and knowledge, therefore, when the opportunity to create something fresh with a new set of values and priorities presented itself, I accepted the same. I joined the company in September 2015 and was impressed at the quality of in-house talent. We merged two struggling banks in just 90 days i.e., on 4th Jan 2016 MauBank was born with unified branches servicing clients seamlessly, which is a testimony of the calibre of my team. In five months, i.e, by May 2016, we merged the two core banking systems. Infosys, our technology partner and core banking solution provider recognized the feat by awarding us the runner prize for Project Management for 2016. You can do social banking and be profitable. MauBank’s SME portfolio is one-third of its assets, with Retail and Corporate contributing one-third each of the balance book. Thus we are a full-fledged balanced bank with a social purpose when it comes to SME’s. In fact, our SME business is self- sustaining and profitable. Post merger, we rationalised our retail branch network from 36 to 24. Still we have one of the best distribution networks in the country with 37 ATM’s and significantly access to customers through 82 post offices, an un-matched competitive advantage. We are also embarking on an International Banking foray with a plan to open offices in five strategic locations in a 3-year-period, i.e., Johannesburg, Nairobi, Dubai, Mumbai and Singapore. What is your message to regional and international banks who are looking to use Mauritius as an investment platform into Africa? Sridhar Nagarajan: Today Mauritius is vis-à-vis the fragmented market of Africa where Singapore was 20 years back vis-à-vis Asia. Twenty years ago in Asia, individual economies except Japan and South Korea did not have economies of scale. In order to access Asia efficiently a consolidation point was needed, and Singapore rose to the occasion and the rest is history. Now Singapore is a thriving international financial centre with over a hundred banking organisations. Similarly, the fragmented market of Africa needs a consolidation or access point. The options are limited in mainland Africa except for Rwanda which could become an international financial transfer centre. However, it has neutrality issues. Dubai is a good consolidation point for the Middle East, but not a natural one for Africa. Therefore, Mauritius is the obvious choice. Mauritius is moving into a position of strength in becoming an access point for trade to Africa, and more and more companies are seeing this unfold. An international financial centre like Mauritius could sustain up to hundred banks in the next decade, given that the IFC proposition picks pace simultaneously. Anyhow, Mauritius should have far more banks than it currently does. There are currently lots of opportunities for American banks, Singaporean banks and Indian private sector banks. I believe it is a foregone conclusion that many banks will be establishing themselves in Mauritius because the Mauritius IFC is vital to managing consolidated business in fragmented Africa and trickle in the international banking sector has just started; Bank of China is a harbinger of that trend. In a decade, there could be over 100 international banks here, like other successful IFC’s. Economist Allister MacMillan noted in 1904 that Mauritius was one of the most active trade ports of that era. He describes that when you look into the harbour of Port Louis, you can see at least 200 ships, best in class. It was rightly the Star & Key of the Indian Ocean, as indicated in its coats of arms even today. Now again after a century, Mauritius is perfectly located in the middle of a USD 300 billion and growing trade corridor, well poised to regain its star & key position soon. What effect, if any, do you think the new taxation treaty with India is having on businesses wishing to move to Mauritius? Sridhar Nagarajan: There has been quite a lot of misconceptions about the Mauritius jurisdiction in the international media and its reports regarding the taxation treaty. It is unfairly and without evidence presented as a tax haven or a no-tax jurisdiction. While in truth it is a low tax jurisdiction with Corporate, Personal and VAT all at 15%. The revised treaty opens new avenues of business like debt and I am sure that many companies come to Mauritius for its access and connectivity and not just tax. Couple of years back the South African Treaty was amended and we still see a growth in South African entities incorporating in Mauritius for Pan-African access. Thus, in my opinion, tax is but one consideration for considering the Mauritius jurisdiction. While being a low tax, predictable jurisdiction, the other benefits of access, legal framework, political neutrality, international arbitration centre, robust regulatory framework, etc., are more significant and built painstaking through decades of democratic process. "

FDI Spotlight: On January 2016, MauBank Ltd was formed following the merge of National Commercial Bank Ltd (NCB) with Mauritius Post and Cooperative Bank Ltd (MPCB). What propelled you to accept this opportunity?

Sridhar Nagarajan: The challenge and economic need to stabilize these two banks made me accept the Government’s request. I appreciated the Government’s genuine intent to take two banks that were struggling in the economic climate and making something good and purposeful out of it. I have always been bullish on the future of Mauritius and have opined in many forums local and international that Mauritius will emerge as the number one hub connecting Africa, Middle East and Asia due to its geo-political advantages and business friendly eco-system built over decades, and thus hard to replicate by others in the near future. The MauBank challenge gave me an opportunity to directly participate in the change rather than in mere advocacy.

I strongly believe banks’ boards, bankers and their attitudes have contributed to the financial crisis. An agenda of ‘profits now’ being aggressively pursued by the short-term focussed equity investors against the will of long-term oriented institutional investors has impacted decision making at banks over the past two decades culminating in the crisis and ironically being sustained even now across the globe. Banking is a business already established for hundreds of years; its strength lies in its years of accumulated experience and knowledge, therefore, when the opportunity to create something fresh with a new set of values and priorities presented itself, I accepted the same.

I joined the company in September 2015 and was impressed at the quality of in-house talent. We merged two struggling banks in just 90 days i.e., on 4th Jan 2016 MauBank was born with unified branches servicing clients seamlessly, which is a testimony of the calibre of my team. In five months, i.e, by May 2016, we merged the two core banking systems. Infosys, our technology partner and core banking solution provider recognized the feat by awarding us the runner prize for Project Management for 2016.

You can do social banking and be profitable. MauBank’s SME portfolio is one-third of its assets, with Retail and Corporate contributing one-third each of the balance book. Thus we are a full-fledged balanced bank with a social purpose when it comes to SME’s. In fact, our SME business is self- sustaining and profitable.

Post merger, we rationalised our retail branch network from 36 to 24. Still we have one of the best distribution networks in the country with 37 ATM’s and significantly access to customers through 82 post offices, an un-matched competitive advantage. We are also embarking on an International Banking foray with a plan to open offices in five strategic locations in a 3-year-period, i.e., Johannesburg, Nairobi, Dubai, Mumbai and Singapore.

What is your message to regional and international banks who are looking to use Mauritius as an investment platform into Africa?

Sridhar Nagarajan: Today Mauritius is vis-à-vis the fragmented market of Africa where Singapore was 20 years back vis-à-vis Asia. Twenty years ago in Asia, individual economies except Japan and South Korea did not have economies of scale. In order to access Asia efficiently a consolidation point was needed, and Singapore rose to the occasion and the rest is history. Now Singapore is a thriving international financial centre with over a hundred banking organisations.

Similarly, the fragmented market of Africa needs a consolidation or access point. The options are limited in mainland Africa except for Rwanda which could become an international financial transfer centre. However, it has neutrality issues. Dubai is a good consolidation point for the Middle East, but not a natural one for Africa. Therefore, Mauritius is the obvious choice.

Mauritius is moving into a position of strength in becoming an access point for trade to Africa, and more and more companies are seeing this unfold. An international financial centre like Mauritius could sustain up to hundred banks in the next decade, given that the IFC proposition picks pace simultaneously. Anyhow, Mauritius should have far more banks than it currently does. There are currently lots of opportunities for American banks, Singaporean banks and Indian private sector banks.

I believe it is a foregone conclusion that many banks will be establishing themselves in Mauritius because the Mauritius IFC is vital to managing consolidated business in fragmented Africa and trickle in the international banking sector has just started; Bank of China is a harbinger of that trend. In a decade, there could be over 100 international banks here, like other successful IFC’s.

Economist Allister MacMillan noted in 1904 that Mauritius was one of the most active trade ports of that era. He describes that when you look into the harbour of Port Louis, you can see at least 200 ships, best in class. It was rightly the Star & Key of the Indian Ocean, as indicated in its coats of arms even today. Now again after a century, Mauritius is perfectly located in the middle of a USD 300 billion and growing trade corridor, well poised to regain its star & key position soon.

What effect, if any, do you think the new taxation treaty with India is having on businesses wishing to move to Mauritius?

Sridhar Nagarajan: There has been quite a lot of misconceptions about the Mauritius jurisdiction in the international media and its reports regarding the taxation treaty. It is unfairly and without evidence presented as a tax haven or a no-tax jurisdiction. While in truth it is a low tax jurisdiction with Corporate, Personal and VAT all at 15%. The revised treaty opens new avenues of business like debt and I am sure that many companies come to Mauritius for its access and connectivity and not just tax. Couple of years back the South African Treaty was amended and we still see a growth in South African entities incorporating in Mauritius for Pan-African access. Thus, in my opinion, tax is but one consideration for considering the Mauritius jurisdiction. While being a low tax, predictable jurisdiction, the other benefits of access, legal framework, political neutrality, international arbitration centre, robust regulatory framework, etc., are more significant and built painstaking through decades of democratic process.

FDI Spotlight: On January 2016, MauBank Ltd was formed following the merge of National Commercial Bank Ltd (NCB) with Mauritius Post and Cooperative Bank Ltd (MPCB). What propelled you to accept this opportunity?

Sridhar Nagarajan: The challenge and economic need to stabilize these two banks made me accept the Government’s request. I appreciated the Government’s genuine intent to take two banks that were struggling in the economic climate and making something good and purposeful out of it. I have always been bullish on the future of Mauritius and have opined in many forums local and international that Mauritius will emerge as the number one hub connecting Africa, Middle East and Asia due to its geo-political advantages and business friendly eco-system built over decades, and thus hard to replicate by others in the near future. The MauBank challenge gave me an opportunity to directly participate in the change rather than in mere advocacy.

I strongly believe banks’ boards, bankers and their attitudes have contributed to the financial crisis. An agenda of ‘profits now’ being aggressively pursued by the short-term focussed equity investors against the will of long-term oriented institutional investors has impacted decision making at banks over the past two decades culminating in the crisis and ironically being sustained even now across the globe. Banking is a business already established for hundreds of years; its strength lies in its years of accumulated experience and knowledge, therefore, when the opportunity to create something fresh with a new set of values and priorities presented itself, I accepted the same.

I joined the company in September 2015 and was impressed at the quality of in-house talent. We merged two struggling banks in just 90 days i.e., on 4th Jan 2016 MauBank was born with unified branches servicing clients seamlessly, which is a testimony of the calibre of my team. In five months, i.e, by May 2016, we merged the two core banking systems. Infosys, our technology partner and core banking solution provider recognized the feat by awarding us the runner prize for Project Management for 2016.

You can do social banking and be profitable. MauBank’s SME portfolio is one-third of its assets, with Retail and Corporate contributing one-third each of the balance book. Thus we are a full-fledged balanced bank with a social purpose when it comes to SME’s. In fact, our SME business is self- sustaining and profitable.

Post merger, we rationalised our retail branch network from 36 to 24. Still we have one of the best distribution networks in the country with 37 ATM’s and significantly access to customers through 82 post offices, an un-matched competitive advantage. We are also embarking on an International Banking foray with a plan to open offices in five strategic locations in a 3-year-period, i.e., Johannesburg, Nairobi, Dubai, Mumbai and Singapore.

What is your message to regional and international banks who are looking to use Mauritius as an investment platform into Africa?

Sridhar Nagarajan: Today Mauritius is vis-à-vis the fragmented market of Africa where Singapore was 20 years back vis-à-vis Asia. Twenty years ago in Asia, individual economies except Japan and South Korea did not have economies of scale. In order to access Asia efficiently a consolidation point was needed, and Singapore rose to the occasion and the rest is history. Now Singapore is a thriving international financial centre with over a hundred banking organisations.

Similarly, the fragmented market of Africa needs a consolidation or access point. The options are limited in mainland Africa except for Rwanda which could become an international financial transfer centre. However, it has neutrality issues. Dubai is a good consolidation point for the Middle East, but not a natural one for Africa. Therefore, Mauritius is the obvious choice.

Mauritius is moving into a position of strength in becoming an access point for trade to Africa, and more and more companies are seeing this unfold. An international financial centre like Mauritius could sustain up to hundred banks in the next decade, given that the IFC proposition picks pace simultaneously. Anyhow, Mauritius should have far more banks than it currently does. There are currently lots of opportunities for American banks, Singaporean banks and Indian private sector banks.

I believe it is a foregone conclusion that many banks will be establishing themselves in Mauritius because the Mauritius IFC is vital to managing consolidated business in fragmented Africa and trickle in the international banking sector has just started; Bank of China is a harbinger of that trend. In a decade, there could be over 100 international banks here, like other successful IFC’s.

Economist Allister MacMillan noted in 1904 that Mauritius was one of the most active trade ports of that era. He describes that when you look into the harbour of Port Louis, you can see at least 200 ships, best in class. It was rightly the Star & Key of the Indian Ocean, as indicated in its coats of arms even today. Now again after a century, Mauritius is perfectly located in the middle of a USD 300 billion and growing trade corridor, well poised to regain its star & key position soon.

What effect, if any, do you think the new taxation treaty with India is having on businesses wishing to move to Mauritius?

Sridhar Nagarajan: There has been quite a lot of misconceptions about the Mauritius jurisdiction in the international media and its reports regarding the taxation treaty. It is unfairly and without evidence presented as a tax haven or a no-tax jurisdiction. While in truth it is a low tax jurisdiction with Corporate, Personal and VAT all at 15%. The revised treaty opens new avenues of business like debt and I am sure that many companies come to Mauritius for its access and connectivity and not just tax. Couple of years back the South African Treaty was amended and we still see a growth in South African entities incorporating in Mauritius for Pan-African access. Thus, in my opinion, tax is but one consideration for considering the Mauritius jurisdiction. While being a low tax, predictable jurisdiction, the other benefits of access, legal framework, political neutrality, international arbitration centre, robust regulatory framework, etc., are more significant and built painstaking through decades of democratic process.