Aditya Puri, managing director of HDFC Bank ?Ltd, one of the most expensive banks in the world in terms of price to book value, didn’t start out as a banker. An executive assistant to the finance director of automobile firm Mahindra and Mahindra Ltd, Puri was jealous of his cousin, a Citibank trainee who used to live in an air-conditioned/carpeted apartment with his batchmates on posh Carmichael Road in Mumbai. There was even a cook and a butler on call. On top of that, the young men were to be trained in Beirut.

“What the hell am I doing living as a paying guest in Colaba, surviving on a toast and half a cup of tea in the morning, and catching a train to Kandivli every day?" Puri wondered. So, he asked his cousin to get him an interview with Citibank, believing banking could not be very different from accounting. Puri got the job, the above mentioned comforts and a “hefty pay hike".

Time it right: The no-cellphone, no-email boss leaves work early

Puri has been in the news for the merger of Centurion Bank of Punjab (Centurion BoP) with HDFC Bank. As he orders a Glenmorangie, I ask for the inside story. “There is no story. It all happened within a week. They first approached Deepak (Parekh, chairman of Housing Development Finance Corp., HDFC Bank’s promoter), and we took it forward. Rana (Talwar, chairman of Centurion BoP) and I are old friends. He was my senior in Citibank," he says matter-of-factly. Both Puri and Talwar are from Chandigarh, and their fathers are good friends.

Isn’t he paying too much for Centurion BoP? I ask. “Not at all. We are paying a 10% discount to the market price of Centurion BoP. The price to book value is not relevant here. We are paying for the value of the franchise, which is highly underutilized."

Puri believes the true value of Centurion BoP lies in its network of more than 400 branches, three million customers, and a portfolio of personal loans and two-wheeler loans. “It’s a steal," he says. The bank also comes with 6,000 employees, but there will be no retrenchments, according to Puri.

“We need more people. Very few senior people may have some issues, but one needs to figure out whether one wants to remain a big fish in a small pond or become a small fish in a big pond," he says.

What about Centurion CEO Shailendra Bhandari? “What about him? He is an old HDFC Bank hand. He will be one of the executive directors managing portfolios such as treasury, private banking, agriculture, commodities, international banking—major growth areas for the bank," he says.

Puri is not worried about integrating Centurion BoP, which is less than a quarter of the size of HDFC Bank. Times Bank, which his company took over in 2000, was bigger, he points out.

I ask him why HDFC Bank is shy of international banking. Global business now accounts for about 25% of the balance sheet of its peer, ICICI Bank Ltd, but HDFC Bank has no presence outside India. “Aren’t you glad that we are not making losses because of our foreign operations? We have no desire to run a treasury-operated hedge fund overseas. I am not into making an unworthy borrower into a top-rated customer through financial engineering. In principle, I am against any exposure to very sophisticated instruments. Anything that does not make common sense may land you in trouble," he says.

HDFC Bank will open a branch in Bahrain and a representative office in Dubai, but will not borrow short to lend long. “We will have matching funding and look for a reasonable margin," Puri lays the outline of his overseas business on the table.

He has always been a straight talker. At Citibank, when Victor Menezes, the former India head, asked him to go to New York, he opted for Saudi Arabia instead, where he could save more money. In 1994, when Parekh landed up in Malaysia to woo him back to India to create a world-class bank, he had one condition—that he be given a “completely free hand" in running the bank. Parekh agreed and Puri did not think twice before forfeiting the special options given by Citi chairman John Read and taking a “huge salary cut" to shift to Mumbai. He was HDFC Bank’s third employee, after its chairman and financial controller. “The bank consisted of me and a table. When we looked for more space and rented a floor at Kamala Mills compound, rats ate the computer wires after the office was set up," says Puri, recounting his early days at the bank.

We shift to Shanghai Club, the Chinese eatery, for dinner and the rest of his story. Here, he orders a Johnnie Walker Gold Label. “We hired the best available talent from Bank of America, Citi and UBS to head different divisions, and told them to hire people of their choice to run their businesses," Puri narrates the untold story of the making of India’s most expensive bank.

HDFC Bank began with five clients—the Tatas, Birlas, Reliance Industries Ltd, Hero Honda Motors Ltd and Siemens Ltd. Today, there is hardly any firm in India which doesn’t bank here. “We do not want to be in any business where we are not a market leader or among the Top 3," Puri says. The next big business opportunity, according to him, is commodities. “We are developing products for middlemen and farmers and traders. This will be larger than the stock market business," he predicts.

Puri is a great believer in technology. He is often seen discussing banking technology at various forums, sharing the dais with tech gurus such as John Chambers and Steve Ballmer. But he doesn’t use a mobile phone and never checks his own emails. His senior colleagues get handwritten notes when he wants to discuss business with them. “Why should I open my emails and respond to them? My secretary types faster than me. I don’t need a mobile phone as you’ll never find a file on my table. Before leaving office, I clear every file. For emergencies, there is my wife’s mobile," Puri says.

He loves to spend time with his wife and children every evening and on weekends. “As a banker, I do network and build relationships with corporations, but not necessarily by attending parties. I visit them at their offices," Puri says. Every alternate weekend, he heads to his farmhouse at Lonavala to unwind. He grows strawberries, mulberries, guavas and Italian lemons there, and plays with his dog, Bushka, a mix of Great Dane and Doberman. He has used his favourite Makrana marble extensively in this house, and Persian carpets cover the floor.

So, who runs HDFC Bank— Puri or Parekh? Puri answers, unfazed: “HDFC Bank is run by Aditya Puri and its board of independent directors. Deepak and me have an excellent personal and professional relationship."

We have egg fried rice with Hunan chicken, steamed fish and stir fried Chinese vegetable, and Puri wants to skip dessert. I suggest that his acquisition of Times Bank in 2000 could be likened to a breakfast and the Centurion BoP takeover to a meal. Does he still have an appetite for dessert when it comes to banking? I ask him while we wait for our cars at the hotel portico. “Why not? We are open to acquisition even today, if it’s the right fit," he says with a smile.


Aditya Puri

Born: 27 October 1950 (Shimla)

Education: BCom (Punjab University); CA (The Institute of Chartered Accountants of India, New Delhi)

Work Profile: Management trainee at Mahindra and Mahindra Ltd in 1975; worked at Citibank between 1976 and 1994, last posting being in Malaysia as country head; managing director of HDFC Bank Ltd since its inception

Car: Toyota Camry

Favourite Film: ‘The Guns of Navarone’ (1961)

Favourite Sports: Cycling and golf

Hobbies: Gardening and trekking