The 11th floor conference room in the South Tower at ICICI Bank’s headquarters has witnessed many stormy meetings. Like the one in progress that warm April day in 2008.
KV Kamath’s A-team — Chanda Kochhar, V Vaidyanathan, Madhabi Puri-Buch, K Ramkumar and Sonjoy Chatterjee — had assembled there, a day before presenting the bank’s budget to the board. Kamath had told them they ought to focus on reining in costs.
But a consensus seemed to elude the group. That was because Kochhar, widely tipped to take over from Kamath, was unconvinced. Everybody else in the room reckoned Rs 7,900 crore in operating expenses was a fair number.
The debate went on, until abruptly, Kochhar stood up and said: “With this kind of numbers, we won’t have a bank to run next year.” That said, she called the meeting to a close.
A couple of hours of brainstorming later without Kochhar, they reassembled in the same room. “We don’t have an answer,” executive director and group HR head at the bank K Ramkumar recalls the team telling Kochhar. “What is the number we ought to be working on?” Without blinking, she said “Rs 6,500 crore”.
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For a few moments, there was a stunned silence in the room. Essentially, she was telling them to maintain operating expenses at the previous year’s level. For people working in an entity that always grew at 35 – 40 per cent each year, this sounded like harakiri. The next day, Kamath nodded in approval and smiled at the numbers. What in the devil’s name, they wondered, was going on? What, indeed!
A new paradigm
For as long as most people who have followed ICICI can remember, the bank has remained married to one mission: Aggressive growth. That is why when news started trickling out that a divorce is inevitable, we had to ask Chanda Kochhar — who has since taken over from Kamath as the CEO and managing director, if this is indeed the case. Quite honestly, it was impossible to miss the firmness in an otherwise temperate voice. “Growth,” she said, “can mean various things. It isn’t just about growing the balance sheet.”
To seasoned ICICI watchers, this is the kind of language that qualifies for blasphemy — the kind of thing an outsider with no clue of the bank’s institutional history would say. But then, we all know Chanda Kocchar is, The Insider. She’s seen it all: How her predecessor KV Kamath transformed ICICI from a crumbling development financial institution (DFI) to India’s most visible universal bank; how he grew its balance sheet five fold in less than a decade; and how he commands fanatic loyalty from the troops. But everything Kochhar is executing right now may seem to be at loggerheads with what her mentor believed in.
Over the next one year, she intends to grow the balance sheet by just five per cent — an unthinkably low number during the Kamath years. But now, she is battening down the hatches on two of Kamath’s biggest bets — plant the ICICI flag outside India and aggressively woo rural India. For some time to come, Kochhar promises there will be no saber rattling on either of these fronts.
And remember the credit card and personal loan businesses? Kamath goaded the bank into war with global giants Citi and Standard Chartered and eventually toppled them a few years ago. One of the first things Kochhar did after taking over was to tell her colleagues to back off from these verticals and cut losses.