Year of reckoning: IDFC First Bank has a retail edge with V Vaidyanathan

V Vaidyanathan is a retail veteran having been retail head at ICICI Bank

On December 18, IDFC Bank completed its merger with Capital First to form IDFC First Bank. V Vaidyanathan, founder chairman of Capital First, will be the managing director and chief executive officer of the merged entity that will start operations with a combined loan book of Rs 1.03 trillion. 

IDFC Bank was carved out of the erstwhile term-lending institution IDFC Ltd. in October 2015, being one of two entities to get a full-service bank licence from the Reserve Bank of India (RBI) in a decade. But the bank had a bloated balance sheet from legacy term loans, which it wanted to grow out of through aggressive retail lending. It acquired a large micro-finance firm, and had wanted to merge with the Shriram Group in 2017, but the deal did not work out. 

The bank’s first CEO Rajiv Lall did not have enough experience in retail lending. Vaidyanathan, on the other hand, is a retail veteran having been retail head at ICICI Bank.