The ICICI Conundrum

ICICI Bank has been active in public memory of late, be it the SMS’es,the advertisements or plain News stories. And all of it seems to be for the wrong reasons! The stock market crisis has been bad and particularly worse for the bank shareholders like me. The stock among select few got particularly hammered but of all the 5000 or so listed Cos, but ICICI has been a singular standout crying hoarse about a certain cartel of brokers and certain vested interests working overtime to pull the stock down.

This is not the first time the Bank has had this kind of problem, a few years ago it reported a ‘run on’ deposits in certain western parts of India due to similar malicious rumors. Is there anything about trading communities & business group activities that can be so detrimental to a particular Company. What could be the motivating factors?

ICICI has been a spectacular story in the Banking & Financial services space marked by a kind of aggression that you normally associate with few family run Indian Cos. Its transformation from a Corporate lending entity to a retail powerhouse has been swift and efficient driven largely by the vision and foresight of its enigmatic leader K.V.Kamath (KVK).

Actually it was a great place to work and learn too as I found out in my 5+ year stint between 1999-2005. What particularly stuck out in my memory was the incredible quality and tenacity of the top management whom I witnessed from close quarters. You got personalized response letters from the MD & ED on sending marriage invitation, you could regularly drive around the town with the Business Head (V. Vaidyanathan aka Vaidy,now country head) sitting beside you and discussing mundane business or directly correspond with them on crucial official matters .

I first interacted with KVK during a branch opening in Manipal sometime in 1999 where he spoke about brand building very passionately. And he was very consistent at that because he would pull down faulty glow-signs while traveling & chide senior officials in meetings when they made power point presentation with the wrong fonts.

Vaidy on the other hand was incredibly unassuming and approachable. One of his ex-colleague from a XIMB , a friend of mine had to tell me that he was not particularly an academic standout but had a certain X factor. In my interactions I could figure out that he had loads of work stamina just like his 40km marathons but more importantly had a good way of dealing with people. No wonder he zoomed through the progression curve & made it to the top without an IIM tag.

Another luminary was Chanda Kochhar who ushered certain kind of sensitivity to client engagements. When I was handling Infosys account, she particularly kept a tab on developments and made regular personal visits with me in tow to client.

However the scorching growth had its pitfalls . Overzealous collection agents messing up with customers or clients complaining of overselling (loans & cards earlier and as in the derivatives imbroglio later) were early indications. So were the ubiquitous ‘tele marketing calls’ that became synonymous with ICICI where every square customer in the retail market was systematically bombarded with carpet calls.

The branches too started getting progressively crowded and the services tended to be impersonal. Credit card complaints among other loan products started blipping on RBI radar frequently. Even the important securitization law had the ICICI stamp when it took Mardia chemicals to court and won.

In the meantime the crown prince-in-waiting Nachiket Mor gave it all up for non profit socially inclusion initiative role in IFMR. The Bank amidst all this has been undertaking a media blitz to project a more responsible and sensitive image and allaying unfounded fears through a sustained media campaign.

So a lot is happening on the ICICI saga and this may not be last you will hear on that front.