Business Today

18 years to the top

Josey Puliyenthuruthel | Print Edition: Dec 23, 2012

A Bank for the Buck
By Tamal Bandyopadhyay
Jaico Books
Pages: 344
Price: Rs 395

There are a few instances of smashing start-up successes in India in the last two decades. There is Sunil Mittal's Bharti Airtel, the world's fourth-largest telecom company by customers, which started its mobile phone services business in 1995. Or IndiGo, started by Rahul Bhatia and Rakesh Gangwal, which became India's No. 1 airline by passengers ferried less than six years after starting up.

There is another such success, less known to the public. It is that of HDFC Bank, which, in less than 18 years of getting its banking licence, became India's most valuable bank in 2011 overtaking market leader State Bank of India. In India's Rs 82-trillion banking industry, HDFC Bank stands tall. (A trillion equals 100,000 crore.) The lender, for perspective, has the fourthlargest balance sheet among banks in the country and the best quality of assets among large banks. All in a relatively short span since 1995.

Tamal Bandyopadhyay, a business journalist, has had a ringside view of this fantastic growth of HDFC Bank in his long years of covering banks. Tamal - I worked with him for nearly three years and will refer him by his first name - starts A Bank for the Buck with a racy, Michael Lewis-like stab: "On a Thursday morning in February 1994, the telephone rang at Citibank House in Jalan U-Thant, a tony neighbourhood dotted with the world's embassies in Malaysia's capital Kuala Lumpur...."

What follows is an anecdote-filled book that jumps between years and places tracing the history of the young HDFC Bank. The main characters are people most financial readers will recognise by name: Deepak Parekh, chairman of housing finance leader HDFC, as also HDFC Bank; Aditya Puri, CEO of HDFC Bank; Neeraj Swaroop, CEO, Standard Chartered Bank in Southeast Asia; Shailendra Bhandari, MD of ING Vysya Bank; and private equity specialist Luis Miranda, to name a few.

The first corporate headquarters at Worli, Mumbai
The first corporate headquarters at Worli, Mumbai
Tamal, a deputy managing editor at financial daily Mint, shows his mastery in telling the HDFC Bank story through small, discrete passages that typically run to less than 500 words. He constructs daily life scenes as if he were there. Starting with how Parekh had a Plan B in case Puri declined to come on board from Citibank in Malaysia. To how Miranda would bring his toddler to the dealing room and how traders would scramble to keep her away from exhaust fans mounted below dealing desks. To how the bank, known from its risk-averse ways, went out on a limb to extend a small Rs 10 crore loan to loss-making Coal India (the bank's exposure to the miner later rose to Rs 700 crore). To how the decision to buy Times Bank was set rolling from the bedside of a dying Bennett Coleman Chairman Ashok Jain.

Such inside detail can only come from years and years of reporting and filing away details and factoids in your head, supplemented with several interviews while writing the book. But that is also the book's weakness. At least on half a dozen occasions while reading, I felt the topic or instance being discussed could have been structured better with some organised research.

For instance, if I were Tamal's commissioning editor, I would have asked him to fold in the list of top 10 borrowers at HDFC Bank, the lender's sectoral exposure, how it managed tricky realty sector loans, a couple of frauds it may have nixed (which bank doesn't have one?!), and other matters of important context in banking. Two other cribs: Tamal's use of first names in his narrative confused me no end (never mind the index at the end of the book), and I would have loved to see an expanded collection of pictures.

I am, of course, being nitpicky and unreasonable. Tamal's book - his first - is a great read and refreshing compared to the quasi-academic staple that dominates banking and, indeed, business books in India.

 Excerpts from the Book

"There used to be paper cups for tea and coffee. We banned them in 1997. We said each one will have to bring his or her own mug from home. We were probably spending about Rs 50 lakh a year on cups across India," said Sashi [Jagdishan], the bank's second CFO. "If you do it now with 65,000 people, even if they take four or five cups a day, it is a staggering amount of wasteful expenditure. So we nipped it in the bud."

A firm believer in practising what he preaches, Sashi is the most spartan spender in his own department. One of his team members, Saurabh Jambhekar, had to celebrate a tenth birthday for his calculator before Sashi yielded and permitted him to replace it.


Aditya [Puri, CEO, HDFC Bank] has no patience with non-performance or slow decision making. When all are killing themselves for twelve to fourteen hours a day, he will take critical decisions in ten minutes. If he doesn't give a decision within ten minutes, even if he does not say a "no", it's "no". If he says he will get back it generally means "no".

And he is mischievous and loves to play all sorts of pranks. Once one of his close friends playfully asked Aditya what he would be sending on his birthday. "Flowers," said Aditya. Goretti [Soares, his secretary] was asked to get the biggest cauliflower from the Dadar Market, one that could feed two dozen people. It was sent in a nice box with a birthday card. [The next year, the friend, a vegetarian, was gifted a live rooster, wrapped in a decorated net.]


ATMs were still a novelty in those days. The bank had prepared dummy ATM cards in the names of [Manmohan] Singh [then Finance Minister] and C. Rangarajan [then Reserve Bank governor]. While demonstrating how an ATM worked, Ram inserted the card with Singh's name into the machine and punched the keys. The ATM at once flashed a message indicating insufficient funds. "You are not the central bank; you can give the FM some money. What's the big deal?" Rangarajan's joke got everyone laughing.

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