1. FE Best Banks Awards: HDFC Bank’s Aditya Puri wins Lifetime Achievement Award

FE Best Banks Awards: HDFC Bank’s Aditya Puri wins Lifetime Achievement Award

AdiTya Puri has a healthy disregard for consultants. “They come to your office, take all the information from your employees and then play it back to you in a PowerPoint presentation,” the MD and CEO once remarked.

By: | Published: August 31, 2016 6:37 AM

 

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Puri’s bigger achievement would have to be the large liability franchise the bank has built in the face of competition from public sector banks that have always had better reach. (PTI)

AdiTya Puri has a healthy disregard for consultants. “They come to your office, take all the information from your employees and then play it back to you in a PowerPoint presentation,” the MD and CEO once remarked. He may have said this in jest but HDFC Bank is testimony to the fact that one doesn’t need a degree from Stanford or Harvard or for that matter an IIM to run a company successfully.

Indeed, Puri seems to have banked on little else but common sense. And some tremendous leadership skills. The result is that few companies in India have achieved what HDFC Bank has. Anyone who invested R10,000 in the IPO 21 years ago would have made R63 lakh. And R2.5 lakh worth of dividends to boot. If that isn’t startling enough, HDFC Bank’s market capitalisation has grown 333 times to $46. 7 billion between May 1995, when it listed, and now; in that time, Citibank’s market cap has risen just five times to $136.8 billion.

Even Puri must not have imagined when he set out in September1994 that he’d build a bank of this stature. To be sure, there was a big opportunity — India was seriously under-banked. But there were several well-entrenched incumbents with large networks. Also, sometimes too much choice can hurt rather than help. And that’s where Puri’s strategy — essentially, to stay with the retail segment rather than chase large corporates or stray into spaces like infrastructure — paid off.

Incidentally, the lender couldn’t for a long time offer home loans, the most retail attractive product in the market.

Nevertheless, HDFC Bank managed to both grow and diversify its assets — today 49% of the book comprises wholesale loans and a fourth of the business comes from semi-urban and rural areas. But there are no blemishes on the balance sheet — the lender has always boasted the cleanest book in the business and non-performing assets have rarely crossed 1%. It’s the most amazingly judicious use of capital.

Puri’s bigger achievement would have to be the large liability franchise the bank has built in the face of competition from public sector banks that have always had better reach. Interestingly, half the bank’s branch network today is in semi-urban and rural areas. Its strong CASA base has allowed it to continuously earn enviable margins of 4% or more. And it speaks volumes for the strength of the balance sheet that the merger of Centurion Bank of Punjab — not the most robust of lenders — was digested without too much pain.

Of course, HDFC Bank started with a clean slate; it didn’t have any legacy issues that some other lenders in the private sector did. But, all things considered, the legacy that Puri will leave behind will be a rich one.

  1. R
    RAJENDRA KUMAR
    Nov 1, 2016 at 1:24 pm
    SIR,I HAVE BEEN CHEATED BY HDFC BANK,KRISHNA TOWER BRANCH,KANPUR AS THERE IS NO RECTIFICATION DONE BY THEM. THEY DO NOT HAVE ANY RESPONSIBILITY TOWARDS THEIR CUSTOMERS. THEY ARE NOT DOING CORE BANKING BUSINESS BUT THEY ARE ONLY INTERESTED IN SELLING LIFE INSURANCE AND PENSION PLANS.THEY REVERSE THE CHARGES OF THOSE CUSTOMERS WHO GIVE THEM LIFE INSURANCE OR PENSION PLANS AND HARR THOSE WHO DO NOT TAKE THESE. I HAD DENIED THEM FOR TAKING THESE PLANS. THAT IS THE REASON THEY ARE NOT LISTENING TO ME.I WAS GIVEN FULL CONFIDENCE BY BM MR.TIWARI AND LAST RM MR. MANISH NARULA AND EVEN BY HIS PREDESESSOR MR. TARUN KHANNA THAT ALL MY CHARGES WILL BE REVERSED AT THE EARLIEST BUT THEY ARE JUST PROMISING SINCE LAST 5 YEARS AND NO ACTION HAS BEEN TAKEN BY ANY OF THE OFFICIALS OF THE HDFC BANK. WHEN THESE OFFICIALS COME AT THE TIME OF OPENING THE ACCOUNT THEY ARE VERY POLITE AND SAY THAT THERE ARE NO CHARGES AND IF ANY CHARGES ARE DEBITED IN THE ACCOUNT, IT WILL BE REVERSED BY THEM. BUT AS SOON AS THE ACCOUNT GETS OPENED, NO OFFICIAL IS INTERESTED IN SOLVING THE PROBLEM OF THE CUSTOMERS. ALL THE OFFICIALS ARE ONLY INTERESTED IN ACHIEVING THEIR TARGETS BY SELLING LIFE INSURANCE AND PENSION PLANS.I HAVE COME TO KNOW THAT HDFC BANK IS THE LARGEST BANK IN THE WORLD. BUT IN MY OPINION THEY HAVE BECOME THE LARGEST BANK BY FORFEITING MONEY LYING IN THEIR CUSTOMERS ACCOUNT. I FEEL THERE ARE THOUSANDS OF CUSTOMERS WHO HAVE BEEN CHEATED, ARE BEING CHEATED AND WILL BE CHEATED BY HDFC BANK LIKE ME. THEREFORE I REQUEST ALL THE APPROPRIATE AUTHORITIES TO TAKE STRICT ACTION AGAINST THESE OFFICIALS AND THE BANK AS A W SO THAT THIS PRACTICE IS NOT FOLLOWED BY THEM OR EVEN BY ANY OTHER BANK. I ALSO REQUEST TO REFUND MY MONEY WHICH WAS DEBITED IN MY ACCOUNT WITH INTEREST. RAJENDRA KUMAR GUPTA (VICTIM OF HARREMENT BY HDFC BANK) MOBILE NO.93362192333C/A NO. 1272320006265 (IN THE NAME OF G D TEXTILE)(AND OTHER GROUP ACCOUNT OF MY FAMILY MEMBERS)
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