HDFC Bank MD Aditya Puri wants his successor to learn his job in just two weeks. The head of India’s largest private sector lender said his replacement, a search for whom will begin soon, should be better than him in all respects. “If my replacement wants to be mentored for 1 year, I don’t want that replacement,” Puri said at the lender’s annual general meeting.
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”.