MUMBAI/NEW DELHI: In late August, a day or two before Sashidhar Jagdishan announced his decision against seeking a fresh term, ICICI Life Insurance CEO Anup Bagchi received a call on his mobile. It was a surprise call from HDFC Bank chairman Rajiv Kumar and nomination and remuneration committee chair Harsh Bhanwala.The trio discussed the developments in the financial sector and other issues before the ICICI veteran got a surprise offer, with the two HDFC Bank directors also informing him about a reference check having already been done with colleagues, peers and regulators. Bagchi is said to have laid down a few conditions, including informing his boss and long-time colleague Sandeep Bakhshi about the offer, lest he learn about it from someone else.
What followed was a fortnight of intense activity, including a video call that the HDFC Bank board had with Bagchi. His and deputy MD Kaizad Bahrucha’s names went to RBI on August 12, with Kumar working to secure clearances before Sashi’s Oct 26 exit. Bagchi’s record helped. None of the businesses he led had faced regulatory penalties or admonitions, and he had served on RBI and Sebi panels.Having tackled the public-sector banking crisis as financial services secretary in 2017, and later taken charge as chairman on June 29, the former chief election commissioner found HDFC Bank fundamentally sound but facing six issues: weak, divided leadership and succession planning; bond mis-selling in the UAE; MSRDC irregularities; a possible US class action; and the CFO’s exit. Over the last three months, most of the issues have been addressed and the board is seen to be working together. It chose an outsider to help shift the group from an era shaped by towering personalities such as Aditya Puri and Deepak Parekh to one anchored in the institution.
Taking fresh guard
Bagchi’s immediate priorities are recapitalising the brand and strengthening the leadership bench. Many seniors are set to retire and the “command culture” has resulted in the creation of satraps for each division.The 55-year-old, currently designated additional director, has the task of breaking silos and putting the institution before individual ambition. He will also have to optimise the balance sheet by cutting high-cost liabilities, shedding assets to bring down the credit-deposit ratio, which stubbornly remains in the high 90s three years after the merger.Technology and customer service are another area of focus. Bagchi also faces the delicate task of balancing HDFC Bank’s aggressive insurance-sales culture with Irdai’s tighter distribution rules, while retaining protection as an embedded offering for less-aware customers.
