A Bank for The Buck, The Story of HDFC Bank Quotes

“but in the early days many things happened that were unpredictable and unheard of in Indian banking history—rats chewing off computer wires, a baby crawling on the treasury floor, bottles of wine hidden in the drawers and whatnot.”
― Tamal Bandopadhyaya, A Bank for the Buck

“This is a bank that does not know anything beyond business. Chetan told me, 'When we make presentations to our MD, he says, "Teri unchi English mere ko samajh me nahi aati hai; mere ko ye bata ki ladoo kidhar hai."' Everybody in HDFC Bank understands what ladoo (a ball-shaped sweetmeat) stands for. The presentations don't last more than four to five slides. Aditya loves talking to the point. 'Paisa kidhar hai woh dikha, mujhe aur kuch nahi samajhta hai, seedha baat pe aa. Mujhe tu global gyan mat de.”
― Tamal Bandopadhyaya, A Bank for the Buck

“A lot of us asked why we weren't pricing it at a premium. We could have got a premium but Deepak said, "leave money on the table for investors. They will appreciate this in the long term." Today, when we have arguments with our promoters, one of the big lessons I learnt from our float is to price an IPO cheap,' Luis said. 'Should we really scalp the shareholders? This is a start-up company. On what basis are we putting valuations? Today they will put a valuation even on a start-up idea,' Satwalekar was blunt in his assessment.”
― Tamal Bandopadhyaya, A Bank for the Buck

“HDFC Bank was the first of the private lenders to go public— even before it completed a full year. 'It was a mistake,' Deepak told me. The RBI required the new banks to go public within a year but all other lenders went back to the regulator and got extensions. 'We didn't ask for it. We were too naive,' Deepak said. 'Everybody took time as they wanted to get a premium. We sold at par, ₹10. But I have no regrets.' Deepak pushed for a par issue as the bank had nothing to show. And the disaster of parent HDFC's listing was still haunting him, though that had happened a decade and a half ago. In 1978, India's capital market was in a different shape and mortgage was a new product, not understood by many. HDFC put the photograph of its first borrower on the cover of its balance sheet, a D. B. Remedios from Thane, who took a loan of ₹35,000 to build his house. The public issue of HDFC bombed. In an initial public offering (IPO) of ₹10 crore, the face value of one share was ₹100. ICICI, IFC (Washington) and the Aga Khan Fund took 5% stakes each in the mortgage lender and the balance 85% equity was offered to the public, but there were few takers. The stock quoted at a steep discount on listing. For the bank, Deepak did not want to take any chance. So portions of the issue were reserved for the shareholders and employees of HDFC as well as the bank's employees. HDFC decided to own close to a 26% stake in the bank and NatWest 20%. Satpal was offered about 5% and the public 25%. The size of the public issue was ₹50 crore. 'We didn't know whether it would succeed. Our experience with HDFC had been a disaster,' Deepak said. But Deepak had grossly underestimated investors' appetite for the new bank. The issue, which opened on 14 March 1995, was subscribed a record fifty-five times. The stock was listed on the Bombay Stock Exchange (now known as BSE Ltd) on 26 May that year at ₹39.95, almost at a 300% premium.”
― Tamal Bandopadhyaya, A Bank for the Buck

“In the first year of its operations, HDFC Bank, which was actually a mere two and a half months old, recorded a deposit base of ₹642 crore, advances of ₹98 crore, investments of ₹221 crore and a profit of ₹80.20 lakh, after paying tax of ₹40.60 lakh. There was not much business to talk about and hence its first annual report spoke about the four core values the bank stood for—operational excellence, customer focus, product leadership and professional people. The report tried to tell shareholders and investors what the bank stood for rather than what it had done, as very little had been achieved so far.”
― Tamal Bandopadhyaya, A Bank for the Buck

“The bank knew exactly what it was looking for and how to go about it. There was consensus on two critical aspects: the system had to be centralized and had to be based on UNIX, even if that meant spending tonnes of money. MicroBanker, a fully integrated online banking automation system, developed by Citicorp Information Technology Industries Ltd (Citil), a Citibank subsidiary, fit the bill, but Citil was not willing to deal with HDFC Bank. A small outfit, Citil thought, would not be able to afford the system. Citil was expanding operations in Africa and Europe and was not too keen to sell the software to a start-up Indian bank. While Citil reluctantly made a presentation on the system, Citibank intervened before a deal could be signed, saying that selling MicroBanker to HDFC Bank could give the Indian bank more muscle as a competitor. Aditya had to call Rajesh Hukku, Citil head, to play ball and he relented. Citil later became i-Flex Solutions Ltd (now Oracle Financial Services Software Ltd).”
― Tamal Bandopadhyaya, A Bank for the Buck

“Aditya is fond of his whisky but prefers to drink at home when he is with his family. Deepak loves Beck's and Heineken beer with his Sunday lunches. His evening preference is Johnnie Walker's Blue Label. He holds the glass but hardly drinks, only taking small sips every once in a while. A smart strategy, especially when he has to hop parties for networking. Ram doesn't drink. For Paresh, even tea is poison. Rajan finds beer too strong and, given a chance, will dilute it. Vinod, the 'original Brit' as some of his colleagues dub him, is always measured in drinking, like his steps while walking. They are all very different from one another; they have their whims, their fancies, their idiosyncrasies, but they have coexisted wonderfully well in professional harmony.”
― Tamal Bandopadhyaya, A Bank for the Buck

“Trade unions resisted computerization in banks till the first decade of this millennium as they feared the machines would replace them and shrink employment opportunities.”
― Tamal Bandopadhyaya, A Bank for the Buck

“A career Citibanker, Samir Bhatia was familiar with Aditya's work-life balance—coming to office at half past nine in the morning and leaving at half past five in the evening. Aditya was a sharp guy with a phenomenal grasp of things. He could work with great speed, clarity and understanding. Samir had never worked with Aditya but knew a lot about him. 'Aditya would go through every credit proposal with an x-ray vision and pick out just a few things that were absolutely necessary. There would be no paper on the table.”
― Tamal Bandopadhyaya, A Bank for the Buck

“Deepak told Aditya he was on the board of trustees of the famed Bombay Scottish School in Mumbai, and getting admission for Amrita would be a cakewalk. Deepak even promised to escort Amrita to the school at Mahim. 'I want complete freedom to run the bank,' Aditya told Deepak. 'No interference.' 'You will get it,' Deepak told him.”
― Tamal Bandopadhyaya, A Bank for the Buck

“But he had to take this call. Deepak Parekh was an old friend. He was more than an old friend. He was the chairman of Housing Development Finance Corporation Ltd (HDFC), India's lone mortgage company founded by his uncle Hasmukh Thakordas Parekh, a veteran banker. Aditya had known Deepak since his days as a management trainee with automaker Mahindra & Mahindra Ltd, his first job after graduation. Aditya's buddy Bharat Shah, later a colleague at Citibank, was Deepak's cousin. Bharat had a group of close friends with a common passion, bridge. These included investment banker Hemendra Kothari, builder Dilip Thakker, Aditya, Deepak and a few others, all power houses who would meet for dinner every fortnight and often go over to each other's homes. 'As a young kid, Aditya used to fix our drinks and stand behind the bar,' Deepak told me.”
― Tamal Bandopadhyaya, A Bank for the Buck

“It may sound a bit didactic but in banking, sometimes, it is not only what one has done but what one has not done that can make a difference between failure and success.”
― Tamal Bandopadhyaya, A Bank for the Buck

“A team of less than half a dozen people can change the culture of the whole organization and drive the business strategy. What's important is that the core team is retained and aligned to make sure that shareholder value is created,' says”
― Tamal Bandopadhyaya, A Bank for the Buck

“An NYSE listing teaches a company to be precise and moderate in the use of language. It”
― Tamal Bandopadhyaya, A Bank for the Buck

“The US Securities and Exchange Commission is a tough regulator. It goes through every document with a fine-tooth comb. Every claim in an offer document has to have supporting evidence and one cannot make a forward-looking statement. If one does, the Commission will ask a company to explain why.”
― Tamal Bandopadhyaya, A Bank for the Buck

“ICICI Bank, India's largest private lender, and HDFC Bank, the second largest in terms of assets but ahead of ICICI Bank in terms of market value, are as different as chalk and cheese in their approach to banking. ICICI Bank is flamboyant, innovative and quick as a flash when it comes to seizing an opportunity. HDFC Bank is staid and waits for opportunities but emerges a winner at the end of the day.”
― Tamal Bandopadhyaya, A Bank for the Buck

“Market doesn't like volatility. It always rewards steady, predictable growth. Aditya Puri controls himself in good times and doesn't lose control in bad times. Since”
― Tamal Bandopadhyaya, A Bank for the Buck

“According to Satwalekar, former head of HDFC Standard Life Insurance Co. Ltd, who was on the bank's board for eight years, the biggest thing about leadership is asking questions and not necessarily providing the answers. 'That makes your people think. Look at the retail portfolio of all banks and NBFCs [non-banking finance companies] in 2008—whoever was aggressive got decimated. The exception is HDFC Bank as they were always very clear in their mind on what could and could not be done. Aditya would ask the right questions and make his people see what was required. The top line was not a target for him. Value creation through profitability was the objective,' says Satwalekar.”
― Tamal Bandopadhyaya, A Bank for the Buck

“Normally, when interest rates rise, banks hurry to raise their loan rates but are slow in offering higher interest to depositors. Conversely, when the rates fall, banks are quick to cut their deposit rates but take time in passing on the benefit to borrowers.”
― Tamal Bandopadhyaya, A Bank for the Buck

“NIM and spread are the two key parameters that give an indication of a bank's operational efficiency. As a concept, NIM and spread are similar, but there is a subtle difference between the two. While NIM is arrived at by dividing a bank's net interest income by its average interest-earning assets, spread is the margin between the yield on assets and the cost of liabilities, or the difference between interest income and interest expense as a percentage of assets. NIM can be higher or lower than the net interest spread.”
― Tamal Bandopadhyaya, A Bank for the Buck

“Ishaat Hussain, a director on the board of Tata Capital Ltd, said that big industrial houses like the Tatas and the Birlas do not face any difficulty in accessing bank finance, but their customers and suppliers find it difficult. HDFC Bank grabbed that important niche. It became a pioneer in vendor and dealer financing.”
― Tamal Bandopadhyaya, A Bank for the Buck

“A good brand, relationships, technology and smart marketing can open doors but after that the business has to be sustained by delivery. Many”
― Tamal Bandopadhyaya, A Bank for the Buck