HDFC's Deepak Parekh is someone who I admire a lot: KV Kamath

National Bank for Financing Infrastructure and Development (NaBFID) chairman KV Kamath on Tuesday, in an interview with Business Today, spoke on various topics, ranging from interest rates and tracking private lenders' performance for staying "wiser" to global recession and people who stand out to him. The NaBFID chief also stated that the corporate sector is generating funds now, which was not the case 3-5 years back.

Here's the edited excerpt from the interview:

Q. People are talking about recession in Europe and the US. How do you see India negotiating a global slowdown and less liquidity in the system?

Kamath: If we were having this chat 2-3 years back, I would have said, yes ... it is a big challenge. But I believe that the current inflation in India and the current inflation in the West is something that probably in a theoretical construct. It has nothing to do with what we have been taught of inflation. Otherwise, could you really imagine that you have inflation of over almost double digits in Europe and real interest rates are probably just say about half per cent. 

So how do you explain this? And real interest rates are about (-)9.5 per cent and slightly different in the US and nobody seems to be worried, starting with the central bankers there. In (the) US, you have a full employment, not seen in the last 40 years and probably seeing inflationary numbers and nobody wants to call it a recession. So, we're learning. We will have to dance to our own music.

We cannot dance to western music and that is where I would commend the government for keeping the interest rates low. But my question would have been if interest rates were being hiked, how would hiking interest rates will bring down the price of tomatoes because that was the key item which inflated the agricultural thing (commodities). So, things are different and by keeping interest rates low, liquidity (being) good, I think we have come out of the crisis along with certain other facilities. Given that, we will have to draw our own map on how we grow and to me that map is have enough investments. Good news is then is 3-5 years back, corporates were not generating enough cash flows to grow. Today, they are and if et all they want funding, it will be at the margin, not at bulk.

India that we are looking at today is completely different in how and where demand comes for what it produces, its stability to implement a project and its ability to fund projects also and of course along with the technology own up that goes around.

Q. You've worn so many hats in your life, ICICI Bank, Infosys, New Development Bank (NDB) and now as the chairperson of NaBFID. Which of these stints have you really enjoyed the most?

Kamath: Enjoyed is too narrow a term. I would have had challenging, sense of containment and enjoyment. Infosys was different as it was an established company with a great history of leadership. So, I was in a transitionary position there. If I look at NaBFID, which we can talk about later because it's still in start-up mode. Then it is really between ICICI and BRICS Bank. ICICI was right in the midst of a challenge going in the 1990s, going on to dream something and make your dream come true. Dream was initially of survival and then building things. I think that was the much bigger challenge than NDB. Overall, I think ICICI would have been the most challenging, fulfilling and learning.

Q. It's being quite a few years since you stepped down from ICICI Bank as chief, do you still keep a tab on how the lender is doing?

Kamath: I keep tabs on everything that is happening around. My interests are to try and understand what happens around me and that includes in every space whether it is an IT space, technology, new technology, old banks -- that indeed would mean ICICI Bank also. So, I look at working results of all banks, try to understand what is happening, just to educate myself, nothing from the point of view of talking to the bank and giving them feedback. I look at all banks' performance and see what is happening, so that I'm wiser.

Q. Who are the people you really respect and admire?

Kamath: As we built our business, we learnt from everybody. Certainly, we learnt about say, what HDFC was doing. So, Deepak Parekh would be somebody who I admire. Globally, we have also learnt from global banks, for example, the ATM (Automated Teller Machine) strategy.