‘The reason for the (dispute) between the Ambanis is simply that they both love the business’

• So did all the other banks other than the State Bank of India.

It was a gradual process, nothing sudden about it. I guess the migration was smooth.

• But there’s a whole case study on how it happened.

Indeed.This itself is a case study and our transformation is also a case study.

• Your transformation has been written about.But your own story is part of the transformation. Isn’t it?

I guess that’s the story of India.

• So, how did life change for you, post-reform?

Post-reform, I look at the past nine years that I’ve been here in two parts. One, the first five-six years: great turbulence. Turbulence in terms of our customers going through the sort of turmoil that you would never wish on them again because of the structural change in the economy.

• Customers mainly meaning the industrialists.

Corporate customers or project finance customers who actually had to take the shock and the brunt of globalisation and reform process. We were dealing with customers who were going through deep pain and ourselves. In a way, transforming ourselves while dealing with the pain. So the first five years was the pain and the next four were years of creativity, of creating something.

• It’s tough because we are trying to do this at a smaller level as a newspaper company. And we find that to bring about transformation in a continuum is very tough because the next day the paper has to come. Similarly for you, the bank must function, you must collect your loans back. And yet, change. It’s a painful process.

It’s a very painful process and the challanges are many and maybe the parallels are the same.In fact what you are describing, you have gone through or are going through,we have gone through the same thing maybe six-seven years back.In our case, the second part of this whole challange was creating a new business.A new business where we had really no core competency. We had only one competency, I would say. That was the people that we had. I call that competency because knowledge, the ability to master knowledge is a core competency in today’s business and I guess we banked on that.

• And you carried on more or less with the same group.

If you look at the leaders that we put in to various businesses, they all came in with long experiences in ICICI Ltd. And they have transformed themselves along with our own opportunity to create this new enterprise.

• Were there times in that process when you thought this can’t happen, it’s too painful. It’s too messy.

Never. I think that was something that the whole team took as a challenge. It was continuous challenge. It was not as if you snapshot it — I’ll do it in two years or I’ll do it in three years.

• From this dodgy public-sector PFI development lending institution to now becoming a modern tech-driven bank.

I think that transformation again has its roots in the people that we have. And you could clearly proceed on the technology path because we have the right kind of people and that was never a fear. We knew that that part was do-able. I think the biggest challenge was really getting the right amount of capital in, getting the NPAs cleaned up and getting the new products.

• In that stage, when the NPAs faced you did you think it was quite an uphill task?

No, even at that point of time, we always strategised what we needed to do to get this problem fixed. Whichever way we looked at it, we found two solutions. One, get capital in and second, clean up. And we adopted that course.

• That’s not easy. Look at the nationalised banks, for example, look at the pressures from the union. It’s difficult to clean-up. Although they are cleaning up. Some of the banks are doing really well.

The challenge here is to be focussed. To know that you are doing this for the long-term and not for the short-term. And keep working on that. And we were lucky that we had a team which was working absolutely with the same focus and clearly would not take no for an answer. So failure was out of the question.

• Reading up on you, I discovered that you are one of the Midnight’s Children, born in 1947. A very special generation of Indians. Describe to me the change you felt in early Seventies, when we moved from a completely controlled situation to now, more or less, an open situation.

The real change one could feel was in the 90s. Because if you look at the vestiges of the previous economic concepts, we could feel them right through the 1990s. You still stood in queues for telephones, you still stood in a queue for cars and so on. It was only in mid 1990s that you knew what change was.

• A very prominent businessman, who is now very successful, told me that when he went to sign his first joint venture, his partner in France said that look you don’t even exist, I don’t even find your name in the phone book. And then he said look you buy phones in the black market, how can your name be in the phone book.

Yes, I guess we did not have to do that. But in 1996, we asked for a 100 phone lines and that was a big number. We were thinking, 100 phone lines, do we really want these? So, a paradigm change has taken place since 1996. For me, the change time is 1996. That is the year when India changed and that change is still continuing. It is still not complete.

• That is Mr Chidambaram’s last shot..

Yes. At that point of time, I think a new wave of things started happening in the country.

• Did you also hear the talk at that moment, there will be losers in globalisation, there’ll be losers in the reform process?

I think we had this refrain that most of the corporate clients would be losers. That was the refrain one was hearing. Because they did not have the skill, they were not structured right in financial terms, they did not have the quality and they did not find the guts. But finally I think we underestimated them on all counts and I think if you look back now, guts came first. They really showed guts. Literally, facing the challenge head-on, getting quality, productivity better, restructuring themselves in terms of financial requirements and you have a new culture.

• And also you discover a lot many new entrepreneurs. If you look at the top 20 list now and compare it with the Top 20 list 15 years back, only four are common.

That is going to happen as we go through discovering new industries and new businesses. I think we’ll see a major change in the businesses that will be successful and enterpreneurs who will drive these businesses. I think that is required because that’s what I call the equivalent of the molecular discovery in business. You discover the new opportunities and somebody takes the ball and runs in a new direction. That’s how you keep the fire burning.

• Another new thing you have created is a very young team. This is your dealing room but I think the average age is very less.

Kamath: If you look at the average age in the organisation, it’s below 30.

• It’s just a little more than the tech companies.

Yes. And if you look at top management team, below the board, it’s probably in the 30s.

• And a lot of them women.

A lot of them women. At the top level, probably 50 per cent women.

• How did that happen, this bank where most of the brass is women?

It’s very simple.I think it’s a matter of running a meritocracy.I guess, we don’t actually differentiate on gender, right from recruitment stage and then it carries through.

• Go back to 71-72. Tell us some stories about Dhirubhai.

What strikes me is the never-say-die attitude. I remember once he needed stuff urgently. And in those times you could only ship stuff. And in three months I heard that the equipment was up and running. I asked him how did it happen and he said I flew it. Until then I had not heard of any of my corporate customers who thought laterally that you could flew it in one day and you cut off one-and-a-half month of shipping time. So every single aspect you had a lateral thought coming in. But real lateral thought I heard about was when Jamnagar was being set up. I went to see him a few days after he had gone to Jamnagar and I had been there just two days back. So he asked me what I thought of the development work and I said it was remarkable for six months. And he said in his typical style, ‘Kya?’. And I asked him what are you saying. And he said that I went for a walk at night and I found everything dark and I asked my sons why is it dark and they said, Papa, it is night. And he said, so what. You can run three shifts and work on three shifts. And the sons told me that we got a lecture on the cost of interest that goes into a project and what it means to the project in terms of viability and why is it so important that you do a project in speed. He called all the contractors and asked them, we want to run three shifts, you’ll take bonuses and you’ll give them. And it was done. Simple concept and these days I see that every project is done in three shifts.

• If he was around today, his sons might have some serious answering to do.

Maybe. Maybe yes. In fact there was another thing he said to me when we were going throught the transformation. He knew that we were facing some tough things and he said to me, changing orbits always creates friction.

• Is that what’s happening with Reliance now, change of orbits after he left?

I think Reliance as a company is in a steady state. So, there is no orbit change as far as business is concerned.

• Orbit-change in terms of leadership change. Because he was such a towering figure even when he was not fully-fit.

Well, I would look at it as something that the family has to settle. Reliance as a company, Reliance as a group is a professionally-managed company and that depth of professional-management would remain.

• You have been a part of this story since ‘71. Do you see this getting closer to settlement or do you see this getting complicated?

I wouldn’t comment on this. But all I would say is that every family issue that I have seen finally gets settled.

• But at the cost of the company.

Here I would say I don’t necessarily see that happening. We have two very mature people, two very intelligent people, two very capable people and I’m sure they’ll ensure that that doesn’t happen.

• And a very smart mediator?

I’m not a mediator. I can best describe my role as helping two people communicate.

• And has the journey been uphill or downhill?

I’d say it’s a steady process of getting two people to communicate. And that has been going on.It’s a large process. The stakes are very high. It’s going on.

• It’s been several months, so are they communicating more or communicating less?

The process is on.

• There were reports in December that it almost settled, signed, sealed but not yet delivered and Mr Kamath was carrying the money in his pocket.

It’s nothing like that. I’m just trying to get two people to communicate.

• Both listen to you.

Both certainly talk to me. I talk to them. So the process is on.

• You’ve dealt with many family-run businesses. Why do families fight when they know it harms them?

Ultimately, I think it’s always the question of ownership and I don’t mean — I own this, you own that. Ownership in the sense you feel a part of the company. And that really is the crux of it. If you look at other family fights, money is really not the issue. Its your involvement in the company which really starts creating problems.

• Is that something Dhirubhai overlooked?

I don’t know.

• So what’s the combination of factors in this particular case — is it ego, is it unfinished business that Dhirubhai left, is it a combination of both or is it just a difference in perception?

I would put it very simply as love for the business. I think both the sons love the business. And I mean this in the purest sense. It’s a difficult decision.

• Both Anil and Mukesh have been on Walk The Talk. When I asked Mukesh about differences, he said that they were going to be there but since he was the elder brother he had to see that they get erased. Is this is love for the business?

Yes, love for the business.

• Love of the business and competition for the legacy?

I think in every family there is an issue and here they’ll find a way to settle it. They are much too intelligent, much too bright.

• But when you started in December to now. There have been stories in media saying that it was settled, you are saying they were premature then? If we meet six months from now?

Let me put it this way. All family matters get settled and I think this one will also get settled.

• And you don’t think that shareholders would end up being much too bruised by then?

I guess, that there is clear focus that shareholders come first.

• Is there a larger lesson for Indian families to settle their issues in their own time or to professionalise?

A lot of my clients are planning for the next generation and look at alternative structures as today it is fairly well-established in the West, in terms of family counselling, family trusts and actually go about implementing it in the first generation. So that everything is in place. Creating value and sustaining value.

• A lot of people say if it can happen to Reliance, it can happen to anybody.

We see a new business in these family trusts. Global banks have these kind of services, so that families can set up these kind of structures and actually ensure that family wealth is protected and actually grows from generation to generation.

• Because I remember, in one of the awards that both Anil and Mukesh got together, somebody said that these two brothers are so like each other that you could start a conversation with one brother and seamlessly continue the conversation with the other the next morning. And from that to this, means that anything is possible.

Absolutely. That is why I believe the structures that are now being talked about — family charters and family trusts — is a great idea.

• You have built a great bank, the second largest bank in the world. You have worked with ICICI for almost three decades. Where do you see yourself in the next 5-10, 15 years?

For the next four years, I think there’s a lot to do in ICICI bank itself because I’m so bullish about India, about what the government is doing and what it has done already that scope is limitless. In financial services we can grow to far heights and I don’t mean ICICI bank alone.

• You were not discouraged by what’s going on now. The government’s inability to pass bills, lot of banking reforms are now stuck.

Not at all.We have come a long way. These are all transitionary. They may put you back by 6 months, 9 months. But our philosophy is stay focussed, things’ll happen. They may take a little longer but they’ll happen.

• And you have faith that the economy will continue to grow?

Clearly. There’s no other alternative. The only country to look at is China. It has to happen. And it has to happen in the real sector, has to happen in services sector. And we as the financial sector have to be a part of it. The Indian banks will have to grow not just in terms of higher growth rate in double digits. We’ll have to think of a five-year horizon in terms of size. Just put it in context. So, we’ll have to think in terms of scaling up to a level which is in multiples of what we are today. For that, all the building blocks have to be in place — capital, people, technology. Look at all the banks coming up. These are all capable banks.