The timing of the book is perfect, HDFC Bank has completed 25 years and is in the pink of health, actually blemish-free, clocking over 20 percent profit for more than a decade and has a single digit NPA when most others around it are struggling.
I have always followed the writings of Tamal Bandyopadhyay on India’s banking sector, and financial institutions, including NBFCs. His book on Subrata Sahara Roy was a riveting read, not without some dustup between Bandyopadhyay and the Roys who once were so powerful politically and financially that they had developed a tagline, Bharat Hain Hamara, Hum Hain Sahara. More copies of the tome on Sahara hit the stands after the slugfest ended, I had a feeling both sides parted happily.
Tamal’s latest one is on HDFC, a bank which - by the writer’s definition - does not celebrate success. Thanks to his journalistic inroads, Tamal has dived deep to understand the bank, its challenges and also what did it take for the bank to change the course in business and also survive the onslaught of nimble-footed financial technology companies?
HDFC Bank 2.0 is brilliantly researched and exceptionally written with some great anecdotes on how the bank worked around its deep-rooted culture and slowly, yet steadily, shifted to the big buck digital transformation. He is a fascinating storyteller and HDFC Bank 2.0 makes one forget the first in the series, A Bank for the Buck, published in 2012. For anyone keen to understand the working of a financial institution, I think these are very valid and pertinent questions. Changing to some big tech revolution is not easy, I remember how India opposed computerisation of banks - the heat was highest in the East - and the dust settled only after bank employees were convinced the computer was there to help, not to kill. So shifting into the digital space is not easy, it’s like asking footballers to suddenly change to rugby by announcing only the size of the ball will change and rest will remain same.
Indian companies, especially the financial institutions have not been fully tuned to rapidly evolving technology, many are called by the author as “stiff-necked companies”. But HDFC, writes Tamal, did not fall for the hop-skip-jump mode but took the bull by the horn. It was the Disrupter, and it avoided being Disrupted. And within a particular time frame, HDFC Bank, India’s most valued, emerged on top in the digital sweepstakes.
So how did this happen? Aditya Puri travelled to California in September 2014 to get a first-hand experience how techies were shaping the lives of big companies across the world. He returned and told his employees to take the plunge. Currently, nearly 85 percent of overall transactions in HDFC is digital, the figure was around 55 percent in 2015. The timing of the book is perfect, HDFC Bank has completed 25 years and is in the pink of health, actually blemish-free, clocking over 20 percent profit for more than a decade and has a single digit NPA when most others around it are struggling.
Much of this success can be traced and credited to Puri’s brilliant leadership, thanks to the processes he put in place at the bank to turn it into a financial marketplace from a brick-and-mortar bank. The book is making waves, no wonder SBI chairman Rajnish Kumar happily joined HDFC Bank MD Aditya Puri, were at the launch in both Delhi and Mumbai, two very important cities so far India’s financial structures are concerned.
And finally, do not forget a simple line tucked somewhere in the copy: At 69, Puri is the highest serving head of a bank anywhere in the world. That’s a very important line for Indian banking.