Puri says his replacement should not require an 18-month handholding for the
job. India's highest paid bank chief, who turns 70 in October 2020, has been
credited with building India’s most valuable bank from scratch. He is also the
country’s longest serving bank chief, having headed the bank since its launch
in 1994.
HDFC
Bank’s steady growth and performance are widely attributed to Puri’s
no-nonsense leadership.
Speculation has been rife for many years on who would succeed Puri and it has
only intensified after he underwent a cardiac surgery in February 2016.
In May 2018, Puri said while speaking to analysts that the HDFC Bank board
would soon start the process of identifying his successor and the depth of
leadership within the bank would ensure a smooth transition. The plan was to
start the process of identifying a successor 18-24 months ahead of Puri’s
retirement, and the bank planned to have a 12-month overlap period when the
successor would work with Puri.
Only three months after that pronouncement, Puri’s most trusted lieutenant and
the heir apparent, Paresh Sukthankar, announced his sudden departure from the
bank, throwing open the succession race. The bank has till date not appointed a
replacement for Sukthankar.
In the annual general meeting, many shareholders expressed their desire that
Puri should continue beyond 70 and they were willing to support a
representation to the RBI.
Puri did not respond to representations from shareholders that they should be
given preferential allotment in an IPO of the bank’s NBFC arm HDB Financial
Services, stating that the reports of an IPO were speculative. Puri said that
branches continue to be relevant. However, the experience in branches may
change. He said that the bank was looking to add 800 branches in FY20, but
would continue to focus only on the Indian market. Puri rued that a slowdown in
one quarter is leading to “excessive pessimism” about the health of the overall
economy.
“Fundamentally, I think there is excessive pessimism about the rate of growth,
just because it has come down in one quarter,” he told the shareholders, many
of whom had asked questions on the macroeconomic worries.
He attributed the dip in economic growth to the general elections, and also
explained that the auto industry, which has been on a rough ride for almost a
year now, experiences a similar phenomenon every four years. The veteran banker
was referring to GDP growth sliding to a five-year low of 5.8% for the March
quarter and the full FY19 growth hitting a low of 6.8%. The comments come days
after Prime Minister Narendra Modi termed those questioning the economic
potential as “professional pessimists” and exuded confidence in the country
becoming a $5-trillion economic giant during the course of his government’s
second term itself. Puri said plans laid out by the government in the Budget
are “very good” and welcomed specific measures like overseas borrowing, higher
divestment target, reviving non-banking lenders, bankruptcy laws and also
getting excess capital from the RBI. He said there is a need to focus on
exports and manufacturing but pointed out that, unlike the
manufacturing-dependent China, “ours is a consumption-driven economy”.
