Bang For The Buck Book
This is the story of the birth and growth of India’s most valued bank—HDFC Bank Ltd—against the backdrop of the new bank movement in India that started in 1994 when the Reserve Bank of India opened up the sector to introduce competition and to force banks to be efficient and more productive. Many books have tried to give meaning to India’s recent history, to put it in the larger context of a complicated and confounding society, but this effort stands out because it does something that has been difficult to attempt—retelling the story of modern India through the lens of business. Given the author’s familiarity with bankers, policymakers and central bankers, this fast-paced, jargon-free book, written for a wide audience, brings to life an engrossing and sweeping tale of 21st century India, with all its foibles and charms.
By writing it as a story the author has kept it interesting by engaging the readers. The objective was not merely to come up with the bank’s history but to revolve a story about the making of this successful bank in India. Tamal Bandyopadhyay’s book is the ultimate insider story of a bank’s birth and its coming of age, brought to life vividly in a sweeping and engrossing eighteen-year-long saga that could only have been retold by India’s most respected and well-sourced banking and financial journalist. The 344-page book is divided into 13 chapters. The book does not follow a chronology but rather a theme, as writer’s objective is not to merely write the bank’s history but to weave the story of the making of a successful bank in India after economic liberalisation. The first four chapters are about the making of the bank: how it was conceptualised, how the team was built and the fun of the initial days when many senior recruits wore helmets and supervised the brick and mortar work at the headquarters and the branches and held training sessions under a tree at a textile mill compound in central Mumbai.
The next four chapters discuss the business philosophy of the bank and how it is different from that of others. Chapter 6 is, in fact, the heart of the book. It talks about the things that make HDFC Bank different from others, in terms of business philosophy, product innovation, cost of funds, risk management and so on. Chapters 9 and 10 are about two mergers, the first instance of a friendly merger through share swap and the biggest merger in India’s banking history, respectively. Again, the emphasis is not on financial ratios and data but on how the mergers happened—the inside story. Of course, there are data but their use is limited to creating the context. HDFC Bank, despite being a highly successful venture, couldn’t escape the regulator’s wrath. On two occasions, the bank was penalised by the RBI.
Chapter 11 dissects what went wrong with the bank, how it got into a mess and the safety valves it created to avoid such incidents. The next chapter tries to analyse the Puri magic, what makes Aditya Puri, the longest-serving chief executive officer of any bank in India, different from his peers. Finally, the last chapter looks at why this bank has been successful. It is not that it has not had problems—in terms of the occasional boardroom fights with the promoter on policies and minor egotistical skirmishes among senior people—but despite these it has succeeded because it is nobody’s bank. The key lesson from the HDFC Bank story is that freedom for professional managers, non-interference by the board and the promoter and passion for success are more important than ownership.
By Ashok Kumar