Aditya Puri: The Marathon Man and his stellar run on the banking track

Few have matched the HDFC Bank chief's longevity at the crease, within and outside the banking industry; a non-nonsense leader, he had a particular dislike for liars and the incompetent

Roger Bannister ran the first sub-four minute mile (3:59.4) in 1954; it’s routine now. How tdough is it to run a bank? When private bank licenses were issued in the early to mid-1990s, few had a clue as to how the plot will pan out. Of the four spawned by institutional players – HDFC Bank, ICICI Bank and Axis Bank are now the pack-leaders; IDBI Bank remains an “outlier” with a chequered life since its inception. Outside of the banks which answer to such a profile, only IndusInd Bank has survived (and done well). The rest have disappeared into the sands of time.

It’s been a stellar journey for HDFC Bank’s “Bannister”, Aditya Puri, who is stepping down as managing director on October 26 after a quarter century at its helm. It’s one thing to say that few would have given up the chance to steer the bank when Deepak Parekh, chairman of HDFC Ltd had made the offer. The opportunity came at a personal cost though its unlikely Puri would highlight this – he had to give up his stock-options at Citigroup in 1993 to helm a “start-up” -- to use the term in vogue now. Remember, he had been identified among the top-50 emerging stars in Citi’s worldwide franchise by its then chief executive officer, John Reed. In hindsight, the biggest gambit he took was to give up the comforts at Citi as its chief executive officer in Malaysia (and stock options) to set up a new-age bank from a room in Kamala Mills Compound in Worli, Mumbai. He had to battle rats; they chewed up the wires of his computers -- thrice!

HDFC Bank is today a marquee brand, and investors have to pay a good price for its stock. It would also not be off-the-mark if you were to view it as a veld between 'Start-up India’ and 'Make in India’ way before these catch-phrases were minted.

There are not many who have matched Puri’s longevity at the crease (it’s unlikely to be bettered as a record). Joseph Neubauer led Aramark for 31 years; Ray Irani did so at Occidental Petroleum for 21 years. That’s if you were to look outside the list of promoter-bosses who helmed firms across the world -- Puri is our own in the Neubauer-Irani mould.

What has set HDFC Bank apart is that it has eschewed risks. In its first decade, it had been tagged as a “boring bank” – to imply, it did not serve up “surprises”, pleasant or otherwise. This had a lot to do with Puri’s personality -- a no-nonsense, conservative banker. Basically, cut your coat according to your cloth; never chase the fashion of the day.  

It was reflected in the way the bank rolled out its retail banking suite. In the mid-1990s when several of his peers chased market share, he refused to play the game. The bank first bought secured product lines into the market; credit-cards were hawked only in 2000. The strategy underlying this was that at a time when you had little by way of personal credit histories or credit bureaus, it made sense to first gauge the emerging trend from the secured retail portfolio before dabbling in the unsecured – read credit cards.

The bank took a leaf out of American Express’s book which had hawked a balance-transfer scheme when it went in to the mass retail cards business earlier. In a single fell swoop, HDFC Bank’s card business got both the eye-balls and wallet-share of some of the best customers who chose to opt for the bank’s plastic. This safe-and-steady approach helped weather the storms. Just how well he read the tea leaves became clear in the post-Lehman world when banks had to go back to their drawing boards -- HDFC Bank didn’t hiccup.

Let’s take the foray into digital. It began as early in 1999 with “NetBanking” and “SMS banking” a year later; then came a “mobile site”, an “app” (routine now, but Bannister-like for those times). He then launched 'Bank Aap Ki Muththi Mein' -- your smart-phone turned into a branch; it was tech-agnostic and worked on iOS, Android, and Windows. Puri ensured that the bank surfed every subsequent tech-wave – be it digital wallets, contactless payments, the options that opened up using near-field communications technology, and even flab was cut over processes.

A criticism is that he stayed at his desk for long. It is pertinent to note that the Reserve Bank of India (RBI) had extended the retirement age for chiefs of private banks to 70 years in September 2014 from 65 years when the Companies Act (2013) replaced the earlier enacted in 1956. It had also overrode the P J Nayak Committee’s recommendation of 65 years. In the year before he steps down, a case was made for an alignment of tenures of private bank CEOs with the Companies Act. Incidentally, the age limit for CEOs and whole-time directors on banks is by way of RBI’s administrative fiat, and not under the proviso of an Act.

As for his leadership style, he had no patience for liars and the incompetent. “When the need arose, he would roll up his sleeves and get down to do the job on hand,” says an associate. He was not known to be one who clinked glasses to schmooze though in his early years at the bank, he perforce had to go through the “drill” as it were. But for the greater part, folks sought him out; and folklore or not, it was a set-routine -- in office at 8.30 am, and pack-up at about 6.00 pm (with a siesta in the noon, often-times). It’s said that despite Puri’s set-piece timings, he expected others to work late. Was it fair? “He has done what he has done. What are we talking about?” retorts a close aide. And his fashion statement remains the cell phone: he doesn’t carry one (and this is not the same as he doesn’t have one). So, rest assured Puri will remain connected with the financial world -- the network will follow!