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Updated: March 19, 2013 00:09 IST

This bank has no place for gyan

N. S. Vageesh
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A Bank for the Buck
A Bank for the Buck

Tamal Bandyopadhyay has a well-earned reputation for being one of India’s top financial journalists. His weekly columns in the ‘Mint’ newspaper are widely read in the financial world. His rolodex and reach are the envy of his fellow professionals. His recently launched book shows why all the above is true.

It is the story of HDFC Bank, India’s most valuable bank — how the idea of a bank took shape, how it was staffed, how it took its first steps and how it subsequently rose rapidly over the last two decades to the top of the banking charts. The book has many colourful vignettes that come alive in the engaging style used by Tamal.

Ralph Waldo Emerson once wrote, “An institution is the lengthened shadow of one man.” Well, in the case of HDFC Bank, you could say it was probably two men. No doubt, there is an impressive cast of characters, of many ambitious young men who gave up the glamour and glitter of a foreign bank job to help start a new Indian bank with aspirations of being world-class. But two men stand out above all — Deepak Parekh and Aditya Puri. The bank and this book is really their story.

Deepak Parekh had the vision to set up a bank and then the patience to pursue the dream assiduously through the many years it took to make the RBI open up the sector to private banks in 1993. His astute networking skills, his rapport with the regulators and the government, his ability to keep the pieces ready when the licence comes, his knack of identifying the right men for leading the bank and choosing to remain in the background — all these are critical to its formation and success. It makes you marvel at the effort involved in creating an institution.

But invaluable as these many qualities were, nothing so defines Parekh’s contributions in the making of HDFC bank as much as his ability to step back, get out of the way and let Aditya Puri run the bank his way. He chose to remain outside the board although he attends every meeting till date as a special invitee.

It wasn’t a total hands-off policy however. Whenever necessary, he used the full weight of his experience and network to pull necessary strings and help the bank.

Stock options

The second impressive character in the book is Aditya Puri, who came in as MD and CEO and continues to date in that capacity nearly nineteen years later. He gave up a fast rising career in Citibank Malaysia to come back on Parekh’s urging and set up the bank.

He used the same tactic that was used on him to rope in other individuals in his team. The selling point was that they were going to create a world class bank. Salaries couldn’t be matched but they would get stock options. In due course they would reap the benefits. And so it turned out for many of those who joined in those early days.

Aditya’s leadership qualities and his blunt and practical approach are reflected in the way HDFC Bank has shaped up as an efficient and functional bank with a no-frills approach to banking. His ability to ask the right questions, to make the big decisions and to make them fast, his readiness to empower teams and hold them accountable, has probably helped his bank pull ahead of the rest. These abilities come through a number of anecdotes and they form part of an interesting narrative.

Aditya’s ability to sell his vision, build his team, keep them grounded and retain them through the growing up years, are awe inspiring. So is the ability to cut costs to the bone — foregoing in the initial years, expensive real estate and furniture for offices and apartments as well as things such as canteens, ‘off-sites’. His no-nonsense approach comes through when he pulls up a colleague who has lent money to a person, assuming him to be a friend of the MD. Aditya growls, “I am running a bank. The boss has no friends!” Or in the way he ticks off someone else, “Show me the money. Don’t give me global gyan!”

There are some interesting quirks too — for someone who has championed technology, he remains gadget-phobic, using neither a computer nor a mobile phone. He comes to office at 9 and leaves at 5.30 every day. Talk of work-life balance — many do it, few practise it. That he has managed to do this right through his career is a testimony to his effective use of time.

This book is useful to those who follow banks or work in them. For a fellow journalist like me, it also helped fill some gaps in knowledge about events surrounding important developments in the bank. For instance, the behind-the-scenes negotiation that led to a couple of mergers that HDFC Bank put through over the years. Other interesting parts include Parekh’s candid admission that the move to go for a tie-up with Natwest Bank (which subsequently cashed out) was a mistake.

Tamal Bandyopadhyay; Jaico Publishing House Pvt. Ltd., A-1, Jash Chamber, Off. Sir Phirozshah Mehta Road, Fort, Mumbai-400023. Rs. 395.

For the bank’s employees — present and future, the book will be essential reading — to understand what it has taken to get to the top and what it will take to stay there.

(N.S. Vageesh heads the Mumbai bureau of Businessline)

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