IBSPECIAL

Aditya Puri enjoys a god-like status inside HDFC Bank. For 26 years he has not only been the chief executive but also the soul of the bank, shaping its brand, growth and destiny. Most of the staff see him as the presiding deity who has led the bank to be the largest in India by market capitalisation.

The new chief executive officer Sashidhar Jagdishan is seeing to it that his former boss is put on the highest pedestal and has designed an adoration coverage that will run till the date Puri retires. He himself is full of praise for Puri. "You are one in a billion. There will not be anyone like you. We will miss you," he said, while welcoming Puri to his last analyst call after the bank announced its fiscal second-quarter results.

Sashidhar is doing more than any other CEO has probably done in India to let the farewell of his predecessor be the most memorable. For the last one month, he has been personally calling up the top corporate honchos from Mukesh Ambani to Bharti Mittal, KV Kamath, NR Narayana Murthy and Jamie Dimon, chairman and CEO of JP Morgan Chase, to speak a few words about Puri. These video clips are then shown to Puri. Refreshed every day with new speakers, they will run till 26 October, the day Puri hangs up his boots.

Puri provides an explanation to this meticulous exercise. "So he (Sashidhar) has introduced himself to everybody, which is just phenomenal," he says.

It is not just Sashidhar but a bunch of senior staff are involved in this whole exercise to internalise the legacy of a man who built HDFC Bank to a powerhouse with 'obsessive energy' and 'full control'. The team is nicknamed the 'Karamchand Gang' (Karamchand is a popular detective series that ran on national TV in the mid-80s) and their task is to ideate and 'add juice' to the farewell campaign. Included in the team is Puri's wife.

"There is a gang in the bank called the 'Karamchand Gang'. What they have done is that they have got together to give me the most poignant and emotional farewell. Sashi has been personally calling up everyone from Mukesh Ambani to government secretaries to say a few words," Puri said in the earnings call.

When contacted by Indianbankingnews.com, a few senior bankers outside HDFC Bank said that this "Puri-heavy marketing is akin to a personality cult being built for the legacy to stay on". Puri "is no doubt the bank's central architect" and "deserves praise" but "the new head and the institution need to be projected more".

Puri believes that the 'Karamchand Gang' has a bigger purpose than just projecting him as it injects a sense of family feeling inside HDFC. "The 'Karamchand Gang' has got the entire HDFC Bank family together," he tells in the analyst call.

The second reason he offers is even more visionary. "It has not only got the HDFC family together, but they have all promised to carry on the legacy and promised to deliver on every single review. In the last one month, Sashi very cleverly has been having two reviews a day with me leading them, basically so that everyone is on the same wavelength," a relaxed Puri told analysts on Saturday evening.

Not being on the same page as Puri could mean being on the losing side. It was clear from the beginning when he was made managing director in September 1994 that he would be the dominant figure in HDFC Bank. "There was almost no room for an alternative view once he had made up his mind after consultations with his team. Inside the organisation, he doesn't like a challenger. As he had the best of strategies for the bank and was always a big achiever, he was justified in building himself as a father-figure," an insider said on condition of anonymity.

The most surprising exit was that of deputy managing director Paresh Sukthankar in August 2018. A veteran with 24 years of service at HDFC Bank, he was touted to be the natural successor to Puri. Even Deepak Parekh, chairman of parent company HDFC Ltd, said Sukthankar was one of the contenders but "he left citing personal reasons".

Puri clarified later that Paresh's exit had nothing to do with who will be the successor. "He left because of personal reasons and not because of any dispute over succession," Puri added.

Even in the last phase of his innings, Puri's voice was decisive. There is no doubt in anybody's mind that he had a big role to play in getting Jagdishan, the group head of finance, human resources and legal, as his successor. In March, HDFC Bank reconstituted the search panel to find Puri's successor and Keki Mistry was replaced by Renu Karnad of the bank's parent HDFC Ltd. The exclusion of Mistry, who is the vice-chairman, MD and CEO of HDFC Ltd, was attributed to the "cessation of his directorship from the board of the bank" as he had completed eight consecutive years as a director, the maximum tenure that regulation allows.

In July, Puri had already dropped a hint when he said his preferred successor "has been with us for 25 years my successor was always in place, at least in my mind". Addressing the shareholders at the bank's virtual annual general meeting (AGM), he also said the candidate has "learnt very well". On 4 August, the Reserve Bank of India (RBI) approved the appointment of Jagdishan as MD and CEO of HDFC Bank for three years starting 27 October.

The final months of Puri's tenure were darkened by a spate of top-level exits. The list included Abhay Aima, group head of private banking; Ashok Khanna, group head of secured vehicle loans; and Munish Mittal, chief information officer. HDFC Bank described these as routine developments but the timing of their departures led to questions.

The most controversial of these was the exit of Khanna's, with Bloomberg linking it to an "internal audit of the bank's vehicle dealer as well as allegations of conflicts of interest in the purchase of global positioning systems for vehicles financed by the bank". Khanna headed the crucial auto unit, which accounted for 10% of the bank's loan book. HDFC Bank's vehicle financing unit had total outstanding loans of Rs 1.2 lakh crore as of 31 March 2020.

On top of all this, US-based Rosen Law Firm alleged that HDFC Bank had misled its investors and filed a class action suit seeking damages. The firm stated that the bank had made materially false and misleading statements regarding the bank's business, operational and compliance policies. HDFC has denied these charges.

These question marks have disappeared for now and the market has cheered the bank's fiscal second-quarter performance. Most analysts have increased the target price based on strong loan growth and stable asset quality. There is robust growth in both advances and deposits despite the coronavirus continuing to wreck major parts of the economy. Advances grew 15.8% year-on-year to Rs 10.37 lakh crore for the quarter ended September, while deposits saw a 20.3% jump to Rs 12.29 lakh crore.

Puri has forged a following in HDFC based on his personality, hard labour and performance as he plotted the growth of the bank right from scratch. He has had a singular purpose of making HDFC Bank the largest private sector lender, ahead of ICICI Bank and Axis Bank. As Sashidhar says, "Puri has steered this company with a near blemishless track record for 26 glorious years."

Puri likes to be known as the main architect of HDFC Bank and to be remembered for the legacy he has left behind. "I am happy of the recognition of the footsteps I have left behind," he says.