TAMAL BANDYOPADHYAY

H D F C BANK...2 by Tamal Bandyopadhyay; Published by Jaico ; Pages 430 ;Price Rs.499/-

*************************************************************

A benignly smiling photo of Aditya Puri adorns the cover page of this book. He has a right to smile happily as the bank he fathered has completed 25 years. Bimal Jalan, ex-Governor of the Reserve Bank of India described HDFC as an institution which is world class, privately owned and functioning as a corporate entry subject to the best governance and international regulatory standards.

The bank, for which the RBI gave the tag.....“too big to fail, along with SBI and ICICI Bank” is a child of economic liberalisation and strives to reinvent itself periodically while many others either remain where they are or become a throwback to old times, an anachronism that painfully survives the passing years”.

A happy event is that the bank got the best chronicler it could hope for—an economic “James Boswell” who makes the biography a piece-de-resistance.

Tamal Bandyopadhyay’s new book appears seven years after the release of his first book on the HDFC Bank. A talented biographer Tamal astutely chronicles the journey of the Bank from “Dawn to Digital”.The Bank has reinvented and turned itself into a digital bank by introducing basic changes, laying down the path for other banks to follow . HDFC Bank isn’t just surviving, it is thriving by disrupting itself rather than waiting to be disrupted by Fintech Companies. Tamal has amassed a wealth of data and presented it so exquisitely.

Certainly the new book is not a rehash of the first volume but an entertaining sequel. Tamal tells the entire story.

Tamal tells the intriguing story of how India’s largest Private Sector Bank took the initiative to become a financial market place and not just remain a Bank, at a time when pundits had predicted the death of Brick and Mortar banks at the hands of VC-funded Fintech Start-ups. This book is no chronological narrative of events, but a the untold tale of the making of India’s most valuable Bank within 25 years of its inception.

We learn how under the astute leadership of Aditya Puri, HDFC Bank has made gigantic strides into the world of digital banking over the past few years. Nandan Nilekani in his Foreword affirms  that the HDFC Bank’s focus on speed, technology, consumer experience, global reach and the application of Artificial Intelligence, remains unparalleled in the industry.

Unlike in traditional banking products where HDFC Bank learns at the cost of others and does not play the role of a pioneer, in digital banking, it has pioneered and continues to lead the way with its fast paced and efficient implementation.

HDFC Bank is today the most valuable Bank in India, with the most consistent record of quarter-on-quarter growth. Tamal tells the story of HDFC Bank which continues to march forward, being world-class in a world of unprecedented odds, and that too at a break-neck speed.

With a legendary leader at the helm who has foresight, aggression and flawless execution capability, HDFC Bank has been the earliest adopter of modern technologies in the Indian Banking Sector for digitalisation.

By the use of Artificial Intelligence, HDFC Bank has transformed Customer Service to Customer Experience and Customer Engagement. In 2018, more than 85% of HDFC Bank’s transactions were digital!

While the banking sector has been plagued by bad loans, HDFC Bank’s loan appraisal and risk management practices have ensured that its books remain clean, again setting an example for its competitors.

Tamal chronicles a story that is a once compelling and unique in India’s financial system. According to Nilekani,

Tamal has enthusiastically documented the epiphany that HDFC Bank’s leadership had in starting out on their digital journey. India is set for seismic changes to day-to-day banking over the next few years and banks who don’t commit to fully re-engineering their practice around becoming a technology company that delivers real-time, contextual banking experiences will wither on the vine. 

HDFC Bank wants to become a platform facilitating a financial experience and it is quite appropriate that this book makes its appearance on the 25th anniversary of the bank. You get everything that went in right from the time Deepak Parekh first approached Puri and then created the team. The digital bank now believes that it is a financial marketplace and everything can actually be done online or through various applications. This goes for getting loans in 10 seconds to shopping using various devices that embed discounts with merchants while making payments without the use of money.

The bank has been the front-runner in every innovation and though ICICI Bank may have been more aggressive, HDFC Bank has been more than steady. Puri's leadership style is to delegate but hold everyone responsible for the result. Hence while there is no interference with the heads of departments, there is serious action when there are slips. Most of the initial team members have left for other jobs, but Tamal quotes extensively to show that they had taken Aditya Puri into confidence and hence there was little friction.

Now coming to the bank, there has been quite a transformation in the business path which started off with corporate banking and moved to the retail space to capture smartly the market by also blending with parent HDFC when it came to taking on home loans with a business equation. Corporate banking focused on leveraging the supply chains of customers. The strategy then moved on to SMEs, which is the next big thing in Indian industry. Relentless pursuit of business, howsoever small, and never compromising on regulation and quality of assets has been the hallmark of the bank.

There have been two very big mergers which have been detailed by Tamal. There are details of how Times Bank and Centurion Bank, which had earlier taken in Bank of Punjab became part of HDFC Bank.

There was the famous IPO scam . The derivatives scam was uncovered by the RBI and then there was the more recent advance remittance against imports scam of 2014. But this can also be seen as parts of business that can go amiss in any system, especially if it is as large as HDFC Bank. The bank has been one with minimal blemishes, which is praiseworthy.

As Nandan Nilekani in his pithy Foreword writes,

"Tamal combines his financial knowledge,eye for detail and an excellent story telling style to create a vivid portrait of India’s most valued bank and its path for future.

One chapter of the book-- “The Commonsense Banker” tries to analyse what makes Aditya Puri the longest serving Managing Director of any bank globally different from his peers, tick.

P.P.Ramachandran.

15/12/2019.