?I have had the ambition to be a financial (sector) entrepreneur since my college days in late ?70s,? reminisces Rana Kapoor founder, MD & CEO of one of the country?s youngest bank, Yes Bank. So why did he linger on as an employee, first with Bank of America (BoA) and then with ANZ Grindlays? Investment Bank for a good 18 years before taking the (quasi) entrepreneurial plunge with Rabo India Finance in 1998, a venture he helped kickstart before selling back his sweat equity to the Dutch major in 2003 to start on the Yes Bank journey with partner, late chairman Ashok Kapur. ?Well, I never got a break before that. And since I was paid well at BoA and ANZ, I kept telling myself that this all skill gathering is preparation for being an entrepreneur one day.?

Though Kapoor did spend time in Indonesia and Singapore with BoA, he was always clear about his real calling. ?I chose to become an India specialist rather than get into expatriate networks like so many of my (that time) colleagues did.? And when the opportunity did knock, in 2003-04, when the Reserve Bank of India awarded three new banking licences?to Kotak Mahindra, Yes Bank and UTI Bank (now Axis)?Kapoor was ready with the blueprint of what he wanted to create?a professional entrepreneur-founded and professional-run ?good swadeshi bank, not a family haati (shop)?.

Yes Bank currently has a balance sheet of Rs 52,245 crore, 185 branches, 3,785 employees, a profit of Rs 524 crore (nine months ending December 2010), and its existence and fairly good financial metrics is almost taken as given now. But were there moments Kapoor thought his dream may come unstuck? ?We have had Hanumaniyan challenges (in setting up Yes Bank). Seven years ago in India, one of the (major) challenges was for people to believe that a greenfield bank can be established by professional anchors.? And then there was the issue of getting pedigree investors, like Rabo, a player Kapoor had previously worked for, for instance. ?They had some initial hesitations to begin with. But once they came in, they remained rock solid for six years.? Rabo, sold off a chuck of its investments in Yes Bank in June 2010, and currently own just 4.9%.

Getting the licence and getting the bank started in 2004 and leading right up to 2010 was version I of Yes Bank?s life. Kapoor says the bank is well into the take-off mode of version II, which runs from 2010 to 2015. Quantitatively, purely from the balance sheet point of view, Yes Bank is aiming at a size of Rs 1.5 lakh-crore by March 2015, and being present in over 300 cities, up from 149 now. ?And 12,000 people by 2015, up from around 3,785 currently. Job creation is one yardstick on which I am held accountable by my mother (too),? quips Kapoor. He is also very mindful that the expansion from 185-odd branches to 750 plus and quadrupling people in the next four years with its emphasis on retail banking will have to be calibrated well if the pitfalls of industry competitors, who grew too fast, tripped and then withdrew, has to be avoided.

?You have to take the high road. There are no shortcuts to the extent that you have to invest in training, you have to build scaled skills and a good service proposition, because somewhere retail is about detail.? Kapoor says he?ll like to build faster on consumer deposits (or liabilities) compared to loans (assets). ?If we?re in third gear in liabilities, we?ll probably be in first gear in consumer asset acquisition.? And different regions will require different approaches. ?I see opportunity in SMEs and micro SMEs in the southern region and public-private partnership in the east.? But above all, he acknowledges that building a homogeneous work culture as its scales to 12,000 people will be critical to success of Yes Bank?s version II.

A banker for over three decades?a period where he witnessed the profession transform from pre-reform days of lazy banking, to post-reform 1990s leading to the ?97-98 Asian crisis, the seriously liberating 2000s to a more intensely regulated sector post-slowdown?gives Kapoor a candidness quite difficult to miss. So when I ask him for his views on some contentious topics, like new banking licences that RBI is mulling over currently, he?s pretty forthcoming. ?Anything I say may be interpreted as biased (since I run a bank), but nevertheless, I will say it. I am of the view, and that is also the view of the Indian Banks? Association, that there is no real or immediate need for new banks.?

Kapoor believes that after the subprime global shocks of 2008-09, there is a new order of banking that is evolving which says that banks should be a pure bank place, meaning that you don?t run the reputation risk of being into insurance, mutual funds or brokerages, which have their own regulators and market, legal and governance risk. ?This new order of banking is unfolding (here and now). And before new banks (are allowed to) come up, there is a certain phase of correction (to be done) in the existing system.? He also speaks in favour of subsidiarisation of foreign banks in India to fence them from global risks and be able to regulate them domestically.

Will he look at acquisitions to shore up on Yes Bank?s version II? ?For me, what is critical is the (synergy in) work culture and that always needs a good deal of fixing, as the rest?technology, systems et al?can be grafted. But (getting) the homogeneity and synergy in the HR culture is very difficult. And this makes inorganic growth very difficult for us.?