Bank for the Buck  by Tamal Bandyopadhyay  ; Published by Jaico ; Pages 343 ; Price Rs.395/-

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The author of this book is an eminent business journalist of our country who is the deputy Managing Editor of “ Mint” daily held in high regard for its incisive insights into the mysterious world of money as also an uncanny knack to anticipate major policy measures. The “ Mint” has a content-sharing partnership with The Wall Street Journal.
 According to the former R B I Governor Dr. Y.V.Reddy, Tamal combined responsibility with forthrightness and he has set a new trend in the dissemination of knowledge about some aspects of the Indian Financial Sector.

The book under review is the story of the  HDFC Bank Ltd which has rightly been designated as India’s most valued bank. Within  18 years of getting its licence the bank  became India’s most valuable bank overtaking market leader  S B I . HDFC Bank has the fourth largest balance sheet among banks in the country and the best quality assets among large banks.

What Tamal has to say has emerged out of four hundred hours of interviews with bankers, central bankers, policy makers, customers and Indian and foreign investors.

The author has given a highly intimate portrait of a bank through the people who dreamt of it, of the people who helped realizing of the dream as also the hundreds of persons whose lives were touched and moulded by the institution.

 The Father of the Bank is Deepak Parikh who assembled the initial team but undoubtedly it is Aditya Puri who led it from Day One. The book is about the bank and Aditya Puri.

 The story of the bank  which was incorporated in 1994 has been divided into thirteen chapters. The first four chapters are about the making of the bank. How it was conceptualized, how the team was built. The next four chapters discuss the business philosophy of the bank . One chapter relates how the bank is different from others in terms of product innovation, cost of funds, risk management, etc. Two friendly mergers are covered in the next two chapters—the inside story of India’s biggest merger. One chapter recounts how the bank was penalized and dissects what went wrong , how it got into a mess and the safety valves it created to avoid such incidents. The magic of Aditya Puri is revealed in one chapter. A final chapter analyses how the bank has been successful.

Deepak Parikh roped in Aditya Puri to head a new bank for which RBI had given an in-principle approval. Puri was in Citibank but agreed to relinquish provided he got full control of the bank. Next to be selected was S.S.Thakur who was a highly respected senior RBI Executive who had a key role in formulating “ F E R A “. Thakur gave up a cushy U N assignment. The first Board of Directors included distinguished members like M.Narasimham, Keshub Mahindra and D.N.Ghosh.

Aditya’s vision was to create an Indian bank with the best in the world on all parameters. He wanted to combine the products and services of foreign banks with the relationship funding and distribution network of state-run banks. To achieve this end he handpicked twelve eminent persons—called “ The Dirty Dozen “—each eminent in his field and holding exalted positions which they relinquished to build the new bank. They were Vinod, Bharat, Ram, Rajan, Shailendra, Paresh, Luis,Samir ,Abhay, Ashish and Subramaniam. Two others who played a stellar role in the making of the bank were Neeraj and Sashi but they were not part of the founding team.

Tamal gives a graphic account of the bank’s nascent years with training sessions under a tree in Kamala Mills compound !. Rats chewed up cables and brought down the network !. Hilarious is the account of an Official’s baby crawling on the trading floor. Once the ATM swallowed the Managing  Director’s Card !.

The core of the book is the chapter entitled “ Doing Ordinary things in  Extraordinary Ways”. It discusses the things that make the HDFC Bank different from others. HDFC Bank is either a leader or close second in whatever retail products it offers. Its retail balance sheet is bigger than that of any bank including ICICI Bank, which was among the first to launch retail business. HDFC Bank was the first to launch mobile banking in 2000 even when it was not launched in the West.

Tamal recapitulates the story of the merger of the Times Bank. The merger was a landmark deal in Indian banking industry. It was the first friendly merger in the banking space and the first one done through the swap route. The second merger was that of the Centurion BOP Bank which took three years to become an accretive merger. It was the biggest gamble that the normally risk-averse  bank has ever taken.

The “Key Lesson” from the HDFC Bank story is that freedom for professional managers, non-interference by the Board and Promoter and passion for success are more important than ownership.

The book has the pace of a vintage Agatha Christie thriller and is extremely well-written and is based on thorough research.

P.P.Ramachandran.

04—09--2016