Book Review: A Bank for the Buck

This is a book about HDFC Bank. But it is also a story about the first set of new banks that started operations in India around the mid nineties. Some of those banks have failed, some have not done too well and are surviving. A few of them have done well and HDFC Bank is one of those banks.Written by veteran columnist and the deputy managing editor of Mint, Tamal Bandyopadhyay has had an impressive set of people endorsing the book. YV Reddy, the former Governor, RBI has written the foreword. A bunch of respected economists and journalists have written glowing endorsements. So I was tempted to read the book.The book opens like a typical piece of fiction.

“On a Thursday morning in February 1994, the telephone rang at Citibank House in Jalan U-Thant, a tony neighbourhood dotted with the world’s embassies in Malaysia’s capital Kuala Lumpur. Amrita, the eight-year-old daughter of Aditya Puri, the chief executive officer (CEO) of the Malaysia operations of Citibank N.A. answered the telephone. The caller was a man gaining tremendous influence in india’s financial industry. He wanted to speak to her father.‘Papa, a Mr Parekh is on the line,’ Amrita yelled. Aditya had just finished his breakfast and was adjusting his tie…”

Begins really well, I thought as I started reading the book. The first section speaks of how the top team was assembled. Each one of them gave up a secure high paying job for the opportunity of building a bank in the newly liberalized India. Lesson no. 1: Examine what drives the top leaders of the organization. Are they short term gains? Do they have a long term stake in the success of the enterprise?The book makes some interesting comparisons between ICICI Bank, India’s largest private lender, and HDFC Bank, which is the second largest in terms of assets but ahead of ICICI Bank in terms of market value. Tamal describes ICICI as “flamboyant, innovative and quick as a flash when it comes to seizing an opportunity. HDFC Bank is staid and waits for opportunities but emerges a winner at the end of the day.” ICICI loves to play the pioneer and that gets reflected in its volatile stock while the range-bound HDFC shares reflect the predictability of HDFC Bank.Aditya Puri wanted to combine the products and services of foreign banks with the relationships, funding and distribution networks of state-run banks. Beyond that the twelve people in the top team were given the freedom to bring their own people to the bank, but discouraged having too many people hired from any one particular bank as this would make it difficult for HDFC to evolve its own culture. The book also explored why some of the “dirty dozen” (as the initial group of twelve is referred to in the book) chose to leave.The value of the book lies in using HDFC Bank as a protagonist to narrate focuses on India’s growth story. Tamal peppers the narrative with characters (too many characters the average person does not know or care to know) and trivia, like an early ban on using paper cups as a cost saving measure for all times (and getting the nod from the green brigade too in recent times). The trivia often gives us a view of the Indian entrepreneur’s mindset – a near obsession with frugality – no biscuits in meetings – except for the Board meetings. No diaries and calendars are given by the bank to clients at the start of the New Year – unless it is a major customer. The tight control exercised over who gets to travel abroad or having employees buy their own Blackberrys. That last bit was intriguing for a bank that was one of the first to leverage technology to start mobile banking.This would be a terrific book for HDFC to give to potential candidates they plan to hire. It would be a great insight into the culture of the bank. I wish every company would have someone write such a book documenting their history and share insights about the culture – the way only an outsider can.The book has tedious amounts of details about every one of the “dirty dozen” and several anecdotes that may mean a lot to a lifer in HDFC but not to an outsider like me. Ever noticed the bored spouse as the better half discusses endless anecdotes about Professors and classmates with crazy nicknames at an alumni get-together? This book is a bit like that. Sometimes I wish Tamal had brought in more characters (competitors and peers) into the plot to better narrate the history of the last eighteen years. That would have been a heady concoction to serve at eighteen. But then we all know that in Mumbai and Delhi one needs to be twenty five to be served alcohol. Maybe Tamal will write that book over the next seven years in time for us to raise a toast.On Twitter @abhijitbhaduri