What's on top of your agenda now that you are the largest foreign bank in India?
We bought Grindlay's early this year and the top of the agenda is to understand their business and grow the two businesses as 100 per cent owners of the largest bank in the country. We bought the Grindlay's business for we believe we can do more with it than the previous owners and the combination; of the two banks will be tremendously advantageous.

What makes you so optimistic about India?
I am confident of the emerging markets in general. Stanchart has one bank in London, one in New York, one in Miami and that's all we have in the OECD world. So everything we do is about banking is in the emerging markets or taking people from the developed markets to banking in the new ones. Stanchart is good at business in markets like India. We have been here for a very long time though we underperformed. The scam was a tremendous blow that I personally came to help sort out.I think we did not realise the great potential that Stanchart has in India and getting Grindlay's is the key to unlock that potential.

I was very optimistic about India even in 1993 when the Narasimha Rao government with Manmohan Singh as finance minister started opening up the economy. The present government has been very effective in attracting both direct and portfolio foreign investment. This is a remarkable country with a huge population. It has problems with education yet churns out hundreds of highly educated people with IT now being 10 per cent of your exports! This reflects a certain vibrancy, dynamism, change and opportunity. I am optimistic about India because of the way it is changing the rules; profiting from its IT expertise and because of its vast market. I am not even thinking of the mass market, but just the middle class market which is what our market will be as a foreign bank, and that is enormous.

At a time when all banks are taking a strategy of balancing risks by diversifying presence in markets worldwide, you seem to have put all your eggs in the Asian basket...
First of all we haven't put all our eggs in the Asian basket although it's a substantial part of the bank. We bank half the Fortune 500 companies and we bank them in Africa, Latin America and Asia. We are predominantly Asia, but Africa generated £100 million sterling last year. Lets say that the money we make in the United States or in the UK doesn't come from lending to a Mr Brown who wants to set up a factory near London but from banking a certain Mr Smith who trades with India or Hong Kong. It's a very focussed operation. It focuses on consumer, corporate, institutional , bank-to- bank and treasury. We do some capital markets and a tiny bit of advisory and that's all. We are a very simple business compared to the so-called universal banks who want to do everything from asset management to equities to corporate advisory and so on.

Don't issues like the lack of transparency or credit delinquencies bother you in the emerging markets?
We have been around in India for about 140 years. We would say that emerging markets are markets we now understand. We have been in Singapore for more than a hundred years and in Jakarta even before Singapore. If institutions have skills, then emerging markets is our skill. That's what we do every day of the week. We have to make a judgment that someone out in one of those buildings may not have a very transparent balance-sheet, but is worth lending money to and that he will repay us. We are good at doing that. Stanchart's delinquent-debt ratio position has been very low. Of course, it may get bad sometimes. When you have the first downturn in ten years, everyone would make losses. But economic cycles by nature are cyclical and things are on the mend now in Asia and almost everyone has forgotten the downturn.

Buyouts come with their own set of problems in terms of cultural fit, surpluses and balance-sheet problems. Why have to chosen this strategy?
Organic growth is very slow compared to the acquisition route. We were sure that the only way to grow the bank in Asia was buyouts. So when Chase Manhattan came up for sale, we inked the deal in Hong Kong. Then Grindlays came up. What I would like to do next? If Taiwan liberalises, we would like to buy something there. In Latin America, we bought UBS's trade and clearing business and we have a very broad footprint, mostly in the bank to bank business. Banking is a very fragmented industry and so mergers and acquisitions will continue to happen.

What would the creation of the largest foreign bank mean for the Indian consumer?
The largest bank will be a very efficient and customer-oriented bank. Banking as an industry is not as customer driven as it should be. We want to place the customer absolutely on the top. You only exist because you make money from the customer. Its not a privilege for the customer to bank with you: it's a privilege for us to have the customer. I believe in that passionately. We will be the most customer-focussed bank and give the Indian consumer the best treatment in services as well as products.

How will a bigger and bulkier Stanchart be a better Stanchart vis-a-vis banks like Citibank and HSBC or nimble and flexible local banks like HDFC and ICICI?
In every market there will be a whole lot of competitors. Globally my biggest competitors are Citi and HSBC. Then there are some very good local banks though they tend to be only a few. But we are all competing. You simply have got to be the place that people want to bank with. That's a function of the products that you have and the service that you provide and the convenience of what you are. I have chaired the financial reconstruction of what was once Britain's fourth largest grocery business that is now its third largest and slated to jump to second slot. In Britain you get the sales data on Tuesday for the week and everybody shares that. For four years the business under performed the market every month. But subsequently for 72 months in a row it consistently outperformed the industry. Now that is about customer-service, product availability and customer-satisfaction. That's how you build a brand. Your brand counts because people link your name to quality of service and want to bank with you.

Will the thrust then be retail?
Yes, retail will be our lead business. That's not to say that we don't want to do corporate banking. But retail will be in the forefront. We believe that retail is much more profitable than corporate.

Analysts have been speculating for a while that given Stanchart's low market capitalisation compared to book-value and estimated earning it is a bargain for predators. Will you consider selling the bank if a good offer comes by?
A board has an obligation to produce value for the shareholder. We will stay independent as long as we go on producing good returns for the shareholder. But if someone comes and offers us a lot of money..we might consider selling it.

How much is a lot of money?
A lot of money is a lot of money...(laughs).