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Ajay Banga: A Diversity Advocate Who Is Set To Be New World Bank Chief

U.S. President Joe Biden has nominated Banga to head the World Bank Group.

<div class="paragraphs"><p>Ajaypal Singh Banga. (Image: Mastercard)</p></div>
Ajaypal Singh Banga. (Image: Mastercard)

With U.S. President Joe Biden nominating him to become president of the World Bank Group on Thursday, Ajaypal Singh Banga, 63, has become the latest Indian to hit global headlines.

The nomination comes after incumbent David Malpass suddenly announced his early resignation from the World Bank leadership earlier this month. Malpass is set to demit office in June, even as his term was to conclude next year.

The deadline for nominations ends on March 29. According to a statement released by the World Bank, a shortlist of three candidates will be selected after nominations are received and a new president would be selected by May.

In its 77-year-long history, the World Bank Group has always been led by a nominee from the U.S., which is also the agency's largest shareholder. So there is no reason to believe that Banga's appointment should face any major challenges. Malpass, for example, ran unopposed in 2019 after then US President Donald Trump nominated him.

Among Banga's predecessors are mostly those born in America, with the notable exception of James D Wolfensohn who renounced his Australian citizenship before he was nominated for the role and Jim Yong Kim, who was born in South Korea and later became an American citizen.

Current head of the International Monetary Fund and Bulgarian economist Kristalina Georgieva also served as acting president at the World Bank for a period of two months, before Malpass took over in April 2019.

Educated in India, Banga received his bachelor's in economics from St Stephen's College, New Delhi. He later went to the Indian Institute of Management, Ahmedabad for his master's in business administration.

Since December 2021, Banga is vice chairman at private equity firm General Atlantic in New York. Prior to that, he headed Mastercard Inc. for a period of 11 years. He has also worked at other multinational firms such as Nestle SA, PepsiCo Inc. and Citigroup Inc.

He was awarded the Padma Shri, India's fourth highest civilian honour, in January 2016, by then President Pranab Mukherjee.

<div class="paragraphs"><p>Source: PIB Archive</p></div>

Ajay Banga receiving Padma Shri from then President of India Pranab Mukherjee in January 2016

A proponent of workplace diversity, Banga has always maintained that there is a need for people with varied backgrounds and life experiences to take up senior roles at organisations.

"...if you surround yourself with people who look like you, walk like you, talk like you, went to the same schools as you, had the same experiences growing up as you, you will have the very same blind spots as each other. You will miss the same trends. You will miss the same curves in the road," Banga had said while speaking at an event by Accenture in 2019.

He has been vocal about gender diversity at all levels even at Mastercard. "...40% of our employees are women. But only 33% of those at vice president up are women. Now that 33 is an improvement of five percentage points over a few years ago, but it's still 33 and it's not 50 and there's no reason why it shouldn't be 50 because that's the actual population out there," he had said at the event.

"So, if you set yourself the idea that you're on a journey, then these are all little milestones around the way. It's important to measure them because now, for example, 50% of our college hires are women."

Banga's tenure at Mastercard saw him pushing for greater card and payments penetration in Asia. This was despite rising challenges from local card networks such as India's Rupay and China's UnionPay.

One of his greater professional challenges in India came when Reserve Bank of India barred Mastercard from new card additions here in July 2021 owing to non-compliance with data storage guidelines. The restrictions were eventually lifted in June 2022, after the regulator was satisfied with measures taken by Mastercard.

Outside of his work, Banga has also served on the President's Advisory Committee for Trade Policy and Negotiations in 2015 under Barack Obama's term. His other engagements include serving as head of lobby group US-India Business Council.

The World Bank Challenge

Once he is appointed, Banga's tenure at the World Bank Group will have to revolve around the multilateral agency's core goals. The focus was reset from its previous "Twin Goals" of ending extreme poverty and boosting shared prosperity, after the World Bank Group released an "Evolution Roadmap" on January 11, 2023.

The new road map according to the group's own statement includes:

  • Recognising the importance of tackling extreme poverty, broader poverty and achieving clearly defined prosperity objectives.

  • Emphasising the importance of sustainability and resilience to reflect more clearly that the group's mission includes global public goods, such as climate change, pandemic preparedness, prevention and response.

  • Reviewing its operating model and consider enhancements to its country engagement model, analytics, financing instruments, and incentives, within an enhanced One WBG approach.

  • Exploring options to expand World Bank Group's resources and enhance its financial model.

Banga has been a proponent of taking finance to the underserved. "The future of money won't be about cash or the form it takes," he wrote in the Wall Street Journal in 2014. "The future of money and commerce will be about breaking down barriers and increasing access for more people across both geographies and incomes. Why? Because with the right payment systems and new innovations in place, how you pay for things drives greater equality of opportunity in society."

While Banga's vast 42-year work experience has been in the field of finance, inclusion and fast moving consumer goods, his track record on important issues like sustainability and climate change has been limited. In 2020, under his leadership, Mastercard announced the Priceless Planet Coalition, where companies united toward forest restoration around various geographies.

To be sure, the World Bank's selection criteria for its new chief does not include experience in handling climate change or sustainability as core qualifications for candidates.