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    Women can be better CFO than men: SS Mundra, Deputy Governor, RBI

    Synopsis

    SS Mundra, the deputy governor of the Reserve Bank of India (RBI) has said that women would prove to be better CFO or chief financial officers as compared to men.

    ET Bureau
    MUMBAI: SS Mundra, the deputy governor of the Reserve Bank of India (RBI) has said that women would prove to be better CFO or chief financial officers as compared to men. “Despite their stellar academic performances, women CFOs are missing from action. Men are result oriented while women are process oriented. Truth is process is as important as the result. Hence, I believe, women would prove to be better CFOs,” Mundra said at a CFO summit organised by Confederation of Indian Industries.

    As of now, there are just a handful of women CFO in the industry. In the banking and financial sector the two prominent CFO include Anshula Kant, who is deputy managing director and CFO of country’s largest bank – State Bank of India and Vibha Padalkar, who is executive director and CFO of HDFC Life Insurance.

    During conference, Mundra expressed concerns about companies that are highly leveraged. “Major concern in the global arena is about the leverage of companies which is enhanced substantially in the corporate world. An IMF report of April 2015 states that 37% corporate debt in the country is a risk. Tests and reports across the world show that Indian companies are most vulnerable in stress scenarios. This is an issue of maximum concern for a CFO and you have to walk the tight rope between many opposites both in your company and the market,” he said.

    Mundra said that CFOs have to understand the interplay of debt, equity and leverage. “Operating with thin equity is like skating on thin ice. Leverage on the other hand is like blood pressure, it should neither be too high nor too low as both are injurious,” he said while cautioning against companies with multiple layers of structure with a holding company on top and several step down subsidiaries.

    The RBI deputy governor also cautioned the CFOs at start-ups about difference between income and revenue. “The role of CFO is of a strategic advisor. In a start-up the question is not just of liquidity but also this immense pressure to scale up rapidly but without the necessary compliance, support and ecosystem. There is need to exercise caution there. They also need to start distinguishing between income and revenue from profit because many companies consider both to be one and the same.”
    The Economic Times

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