A bank for the buck

Book Review – A Bank For The Buck: The Story of HDFC Bank

Of late one of the most discussed topics related to HDFC Bank is the impending retirement of the colossal Aditya Puri. Most of the market feels that the bank is more than capable of handling this transition. As recently as 10 days ago, the bank has set up a panel to help find a suitable replacement for Aditya Puri, who is the longest serving chief executive for any private bank in the country. It was for this reason that I initiated a search on Amazon, to find some suitable material in order to know more about the famed bank and its trustworthy captain. I kind of felt ashamed to not know about Tamal Bandhyopadhyay’s A Bank for the Buck: The Story of HDFC Bank Like every other “voracious reader” in the country, I ordered the book and embarked on the journey to find more about HDFC Bank.

The author has strung together a piece laced with a lot of minute details which all add up to be the Goliath you know today as HDFC Bank. It all started when Deepak Parekh started to proactively assemble an A-Team. This was even before acquiring a banking license. The very act of assembling the team was reminiscent of an existing practice among foreign bigwigs in the Indian talent market. Deepak Parekh went into hunting for the crème de la crème, picking out the best upcoming stars of Citi, BofA etc.

The beauty of this approach was that Deepak Parekh was able to sell the idea of the untapped opportunity in the Indian banking services space to his A-Team. Most of the first employees took a major pay cut from their high-ranking positions in major banks for a share in the vision that was “HDFC Bank”. They forwent their hefty packages for stock options in HDFC Bank. It’s quite interesting to note that most of them still hold on to their shares even now. One can possibly draw comparisons here to the importance of “Skin In The Game”.

The author further sheds some light into the early stages of the bank, with a notable instance of getting the initial corporate accounts even before the licenses were acquired. Even the instance of cutting down paper cups from the offices, thereby cutting down expenses by 50 Lakhs yearly tends to catch the eye of the reader.

The company’s growth is well underlined, all the while giving insight into the functioning of the “Dirty Dozen”, a phrase the author has used to mention the initial team. Even though HDFC Bank had acquired its license as a corporate bank, Aditya Puri was clear in his idea for the future. His steadfast approach in making the bank a household name in the country, can be summed up by his quote “We should make money out of every transaction in the country”. The growth is described well, with instances of acquiring big clients, transition to digital and how the advent of settlement clearances affected the business.

How the bank navigated through the 2008 crisis also finds a spot in the book, but what’s more interesting is the sneak peak into Aditya Puri as a person, and his vision. He almost quit the project over a dispute about HDFC Ltd unwilling to give the bank the same name. Aditya Puri is known as “A Punjabi who thinks like a Gujju”, and his motto of “kaun dhandha de rahe hai” is visible everywhere. He was unwilling to curry any favours to any of his friends/family and did enough to put the message across to his team.

An interesting fact mentioned in the book is that even 15-20 years back HDFC Bank was trading at 4 times book. It’s not looking all that overvalued now, is it?

TPJ’s Verdict

All in all, it’s a good read and a good insight into the men who made a bank believing in the growth of Indian banking. You can find the book here

If you are a book aficionado please also go through our book review of IIMA – Day To Day Economics by Prof. Satish Deodhar.

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