The Big Wave & its aftermath

It was a serene night setting on the 10 floor of a hotel in central Chennai recently. The roof top setting had a variety of seating arrangements each giving a section view of the panoramic night lit view of the city. The weather was surprisingly pleasant, the summer onslaught would begin little later. With a light blanket of smog engulfing the city, the city lights appeared with a halo down below. Amid this setting were 2 old ex-collaegues of mine, the 3rd one expecting us to join any time , and involved in some light banter. One among them had just left a Sr.Mgt role in a multinational bank of recent history to set up his own fledgling firm. The other one also had followed suit. Some of our talk would hanker back to the days we had spent in a high profile bank earlier. For we had seen the good days of this bank that rode the big wave in the consumer market between 2000-2006 and a lot of exciting things had occurred then.

But some time last year this bank went into a so called ‘tactical retreat’, which essentially meant that it had abandoned its pure unadulterated high growth strategy . So it scaled down from disbursing roughly 1200 Cr of Car loans each month in 2006 to less than Rs 100 Crore a month in 2009. Other large volume products like Two wheeler , Small ticket Personal Loans (STPL)were not so lucky, they were abandoned altogether. The collateral damage of this demolition exercise was felt on the careers of innumerable people both within the bank structure & those outside like DSAs (or direct sales agents). The latter had a veritable army of their own who had thrived on the generous dole out of sales linked incentives . And like Narayana Murthy’s orderlies they were famed for being millionaires overnight. People within the bank structure i.e, on its rolls who until then were the darlings & free masons of the retail market , and accustomed to fast track growth & hefty bonuses and incentives were suddenly left in the lurch. They became a part of the so called ‘Common Pool’ a term ingeniously devised by a shrewd HR to either find less honorable avenues within the Bank or put on undeclared notice.

The bank had suddenly shed its skin & was chanting the new 4C mantra - Capital conservation, Credit Quality, CASA & Cost Optimization. In practice it meant

• The bank became extremely choosy of whom it lent to i.e, select prime instead of prime & subprime customers. These customers had to walk into the bank branches instead of being hounded in the open market
• Employees who were hawking loan products & those underwriting them were shifted to recovering delinquent loans. Few others were moved from the truncated retail lending business to branches to chase current & saving accounts or HNI individuals

As we were discussing the aftermath the third one who epitomized this change joined us, from being a Commercial & Personal equipment loan champion in the bank he lamented his current role of a Collection Manager whose daily routine now was to be the 4th in queue of bank executives standing in front of the dreadful defaulted customer. Life had come a full circle for him like many others.

All this in the new lingo of the bank’s fiendish HR head, who incidentally bears his name to a Hindu GOD is , ‘ Collections are now a part of Customer Service’. Many of the bank customers who bore the brunt of its goons earlier couldn’t have scoffed less.