GS Sundararajan joined Shriram Group as the Managing Director of Shriram Capital Ltd, the holding company of Shriram Group's financial services and insurance businesses across India and overseas. Prior to this, he was the CEO and MD of Fullerton India Credit Company Ltd and was also nominated to the Boards of two financial services investments of Temasek in China. Sundararajan was an integral part of Temasek's vision for India in the banking and financial services space.

Earlier, he was the MD and Head of Citibank’s SME and asset based finance business in India. He started his career in sales with Eicher Mitsubishi and went on to head the captive finance arm of this company in India. He is also the non-executive Chairman of the Board of Directors of Vistaar Financial Services Ltd., a livelihood and small business finance company based in Bangalore. Sundararajan holds a Bachelor of Engineering degree from Coimbatore and a Post Graduate Diploma in Management from the Indian Institute of Management (IIM), Ahmedabad.

In an interview with Sunil Kumar Singh, he says, “Shriram Group is now looking at acquisitions and planning to expand beyond the country’s borders via the insurance business.”

Shriram Group couldn’t qualify in the last round of banking licensing by the Reserve Bank of India. Is getting into banking space still a part of your business strategy? If yes, are you interested for a small bank licence or wholesale consumer banking?

The Shriram Group always intends to have a banking licence to serve the unbanked sections of society which is still distanced from formal banking services. However, being one of the largest NBFCs with assets under management (AuM) of over Rs 60,000 crore, we are keen on a bank platform which not only suits our business model but also protects our existing customers as the new bank grows sufficiently to serve their credit needs; this is a major challenge for us and for the regulators who design the guidelines..

Could you give us some details on your expansion plans, especially Shriram Capital’s plan to expand its overseas business in non-life insurance segment?

Shriram Group is now looking at acquisitions and planning to expand beyond the country’s borders via the insurance business powered by our partnership with the Sanlam Group from South Africa. Our group may look at domestic acquisitions in the non-motor areas of general insurance business and in the housing finance business. We are predominantly present at the lower end of the pyramid in the businesses of transport, enterprise finance and insurance. We have opportunities to broad-base these customer segments and geographies across the country.

For the April-June quarter, the economy grew 5.7%, highest in the past two-and-a-half years. The country’s current account deficit (CAD) for Q1 ended June also dipped sharply to 1.7% of GDP from 4.8% of GDP in Q1 last year. How do you assess the overall mood of the economy? Do you believe we’re now in a better position than what we were 6 months back?

India's economic growth is gaining momentum and may end up with a GDP growth rate of over 5.5 per cent. The new government, which took charge in May, has initiated various measures to attract more investments and remove bottlenecks in the infrastructure, among others; to boost growth. The country has the opportunity to achieve faster and more inclusive growth. India needs to improve fiscal consolidation by shifting from subsidies to investment in social and physical infrastructure, control inflation and improve financial stability. At the same time, the country should improve infrastructure, simplify labour laws and pursue tax reforms.

The recent bond sale by Shriram Transport Finance in July got tremendous response, and analysts call it the highest first-day mobilisation among all private sector bond issuances. The non-convertible debentures raised more than treble the amount of the core issue size. Were you expecting this overwhelming response?

The overwhelming responses are basically owing to your business model for each vertical. Shriram Group’s businesses strive to serve the largest number of common people. Consider these: commercial vehicle financing; consumer & enterprise finance, retail stock broking, life insurance, chit funds and distribution of investment & insurance products. Our foray into non-life (general) insurance is again a strong expression of this commitment.

What particular strategies you suggest to revive domestic growth and spur investment?

The Union Budget has provided certain indications of maintaining a stable and predictable tax regime for investing public and develops business confidence among entrepreneurs. A key measure has been to reassure foreign investors that India remains an attractive destination. Expanding FDI in defence and insurance to 49% and allowing FDI in e-commerce as well as liberalisation of urban development would bring in vital funds to these sectors.

The government has taken definitive steps to revive capital markets and strengthen the financial sector which will help raise resources for investment. The banking sector will also be capitalised in accordance with Basel III norms by adding more public shareholdings.

More importantly from our perspective there is a concerted action that has been initiated to set up a separate architecture for small business finance; this according to us will be the single largest step towards a sustainable GDP growth strategy for the next decade.

We hope all these measures would take our economy to better days ahead.