SBI's Kumar, HDFC's Puri speak on their careers, legacies, motivations

The two titans of Indian banking also spoke about what it takes to succeed in the highly competitive and byzantine financial services sector

"Picture abhi baki hai” was HDFC Bank Managing Director Aditya Puri’s cryptic comment when he was asked about his post-retirement plans. Participating in a fireside chat at Unlock BFSI 2.0, a series of webinars organised by Business Standard, along with Rajnish Kumar, State Bank of India’s chairman, Puri said he derived tremendous satisfaction from the fact that “his successor thinks he is lucky to have got things on a platter”.    

On the legacy they are leaving behind, Puri said he was leaving a “trusted brand”, while Kumar said he would leave behind a “few saplings which his successor will nurture”.

Puri said he wanted to be involved in health, education, and digital technology. “People are underestimating the power of digital transformation of this country. They are underestimating the power of the rising middle class. They are underestimating the power of semi-urban and rural India,” he said. While Puri retires from HDFC Bank in October, Kumar’s three-year term at SBI also ends in the same month, unless he gets an extension.

The two titans of Indian banking went down memory lane and spoke about their careers, legacies, motivations, and what it takes to succeed in a highly competitive financial services sector.

“I would be lying if I thought it would become so big,” said Puri, under whose 26-year tenure HDFC became the largest bank in India by market capitalisation. “The objective was to make sure we are one of the best banks internationally, and I am quite satisfied with having reached there,” he said.

Puri, who counts JP Morgan CEO Jamie Dimon as one of his inspirations, said the biggest challenge of his career was to scale up the bank. “When you don’t understand the challenges required to scale, you will falter.”

Kumar said perhaps no other chairperson had to face as challenging a time as he faced. “When demonetisation happened, I was MD. As chairman, I witnessed the merger with associate banks; we underwent asset quality reviews and a stress on the balance sheet; then there was the bankruptcy code, and now the pandemic.”

Kumar said anyone who joined as a probationary officer in SBI had the ambition to become chairman, but it was a long journey. “It is not that what I have, others did not have. They were equally competent people. Maybe, to some extent, it is destiny,” he said, adding that like most officers, he too had missed a promotion once.

When Puri was asked if he could go back in time, would he do things the exact same way, he replied in affirmative, while Kumar said he would probably have been a teacher if not a banker.

On the importance of money as a means of motivation, both Kumar and Puri said money as a motivator lost its value after a point. “For me State Bank is everything. So it is the loyalty factor,” Kumar said.

“Money has to be regarded as a collateral benefit and beyond a certain point, it is just a figure. It is the passion you put into a job, it is the desire to achieve that counts. The young people need to understand that money cannot be a prime motivator,” Puri said.

The two also spoke on policy, financial and economic matters.

Kumar said the economy had seen a recovery from June, but cautioned that sectors like aviation, tourism, hospitality and entertainment services would continue to be severely stressed. He added that there had been no pressure from the government for banks to support the loan guarantee scheme for micro, small and medium enterprises.

“There was no pressure from the government to support the MSME scheme. The scheme was designed in consultation with us. It is a well-designed scheme, which is why it is so successful,” Kumar said.

Kumar and Puri also spoke on the term loan instalment moratorium scheme, which ends August 31, and is a matter in front of the Supreme Court on whether interest could be waived or, whether banks could stop charging interest on interest accrued during the moratorium period.

Puri said the decision on moratorium by the government and the Reserve Bank of India was a good one since banks’ cash flows were getting affected, while Kumar said the numbers differed from bank to bank.

Kumar said while demand for credit had not been high during the Covid-19 pandemic, the banks had tried to protect senior citizens from falling interest rates even as operational costs for serving savings bank account customers were high.

On bank consolidation, Puri and Kumar differed a little from one another. While Puri said that consolidation just for the sake of it would not help, and ownership did not directly co-relate to efficiency, Kumar said public sector banks eventually became clones of one another, and supervising a large number of banks was challenging for regulators.