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Gunit Chadha on why har ek friend is indeed zaroori in one’s personal and professional life.
The Arabian Sea is glistening in the background and the sun-drenched, 18-hole golf-course is all around us. We’re at the High Tide Restaurant and enjoying its cool comfort that has nothing to do with air-conditioners, but with the breeze gently blowing from all directions. The long drive to the United Services Club, better known as the US Club, in Mumbai’s Colaba was a stretch, but we end up thanking Gunit Chadha for choosing it as our venue for lunch, write Shyamal Majumdar and Somasroy Chakraborty.
Chadha is dressed for the occasion – a Polo T-shirt, jeans, Ray-Ban glasses and casual shoes – and seems to be in the right mood as well on a Saturday afternoon. He asks for Thums Up and masala peanuts and pulls his colleague’s leg for ordering a basket of assorted breads, while the waiter looks lost. “You only get rotis and aloo parathas here, my dear,” Chadha says. He is a member of the club, courtesy his father who was in the army. He would have also ended up in the Indian Army but for a freak accident on the day of the interview.
The 51-year-old CEO of Deutsche Bank India says he considers Aditya Puri (MD of HDFC Bank) a role-model for his rigorous approach to banking, his client focus and his ability to have a life beyond work. As Chadha notices us looking at the two mobile phones he is carrying (it’s public knowledge that Puri doesn’t have a mobile phone or at least doesn’t carry one to work), he is quick to add that unlike Puri, who was his former boss, he remains a consummate cell phone user. “There has to be some individuality,” he says with a grin.
The “individuality” extends to other areas as well. While his role model avoids evening networking parties, Chadha makes it a point to attend them at least six days a week. “Har ek friend zaroori hota hai, yaar,” he says, adding that he immediately called his “good friend” Sunil (Mittal, Bharti Group Chairman) to congratulate him on Airtel’s brilliant ad campaign. It so happens that friends are mostly his clients too.
Chadha volunteers to choose the lunch menu: rotis, Goan fish curry, palak paneer and dal fry. With the ordering out of the way, Chadha lets out another secret: he has been spending at least an hour every weekday in a Cafe Coffee Day (CCD) or a Barista outlet — sometimes alone just to introspect, but mostly with junior colleagues so that the organisational layers in between don’t come in the way of a freewheeling chat. And every Sunday, 10 of his close friends meet religiously between 11 a m and 12 noon just to chill out.
The food is piping hot and tastes much better than any standard five-star fare. As we dig in, Chadha says chilling out also means watching almost every single Bollywood movie with his wife. “A bad Bollywood movie has never been made,” he says with a laugh.
We start wondering whether the work-life balance is too heavily skewed towards “life” in Chadha’s case, but soon figure out that there is a method behind the chill-outs and coffee breaks outside office. “Clients and junior employees are important barometers to judge an organisation’s health. Clients will crib about the slightest shortfall in performance and junior colleagues will crib if the organisation is failing to recognise their talent,” says the CEO.
We steer the discussions towards Deutsche Bank that he joined eight years ago after a longish stint in Citi (in the US, mostly) and then three years in IDBI Bank (at 39, he was the youngest CEO of any bank in India). Deutsche was the first to approach him with an offer a day after he resigned from IDBI. What he heard from Anshuman Jain and Juergen Fitschen (they will take charge as Deutsche’s global co-CEOs in 2012) impressed him and he accepted the offer to head the bank’s India operations just before going on a month-long vacation to the US.
The bank’s capital base in India has crossed Rs 7,500 crore from barely Rs 1,000 crore when he joined and the employee count has expanded to 8,000 from 500 in this period. When Chadha joined Deutsche, he was the only MD in India. That number has gone up to 34 now. The bank’s balance sheet has expanded to Rs 30,000 crore and the India business is now its fifth-largest profitable operation. In the last five years, net profit in India has grown 38 per cent, net bad loan ratio narrowed to 0.2 per cent, return on equity improved to 22 per cent and net interest margin climbed to 5.9 per cent.
There’s more. Deutsche didn’t have an investment banking operation when he joined. Today, Chadha says, it is among the top three investment banks in India, managing five of the six largest IPOs in India’s capital market history — Coal India, Reliance Petroleum, Reliance Power, DLF, and Essar Energy. Similarly, in the custody business, it has over $150 billion of assets. The same is true for another niche business — the foreign exchange business that is becoming very important because when customers borrow in dollars for five years, 10 years or raise perpetual bonds, they need to hedge currency risks. Today clients need to hedge commodity risks as well. So, that business is something that plays to a global strength.
It’s certainly not been roses all the way and Chadha is candid enough to admit his mistakes. One of them was entry into credit cards that Deutsche was quick to sell. “The timing was wrong since it coincided with the 2008 slowdown and I thought it was better to get out. There is no scope for ego in business,” he says.
On the proposed subsidiarisation of foreign banks in India, Chadha says, while the move is welcome, the Reserve Bank of India should be tolerant towards the business models of global lenders here. He argues that many of the foreign banks do not understand the business model when it comes to farm lending and do not have a proper risk-management framework for such operations. Hence, these banks should be asked to bear the cost of the last mile but they should not be forced to build it. He also suggests innovative instruments like priority sector trading certificates and that foreign lenders should be allowed to finance institutions like National Bank for Agriculture and Rural Development and Small Industries Development Bank of India to aid the financial-inclusion drive.
The lunch is over, but Chadha suggests we take a stroll on the promenade by the sea. He thinks writers have a unique privilege that nobody else enjoys and promptly offers an example. He remembers what author Chetan Bhagat told him at a recent get-together at his home when Anshu Jain was on a visit to Mumbai. Bhagat, an ex-colleague at Deutsche, took him aside to tell him how he found it difficult to meet Chadha while he was at Deutsche India. “But now that I am an author, I am getting a dinner invitation to meet the would-be global co-CEO!” Bhagat said.
The almost picture postcard setting gets him into a nostalgic mood. He considers himself lucky to have qualified for the Indian Institute of Management (IIM), Ahmedabad. He says his decision to choose the “path of least resistance”, in other words, study economics in Delhi’s St Stephen’s College, helped him get a place in the country’s most prestigious management school.
“I wasn’t brilliant. I did not qualify for the IIT [Indian Institute of Technology]. In the entrance test, I didn’t even understand the questions. In my Physics paper, I remember I was telling myself this is not me. So I chose a path of least resistance — economics. At least there I could make assumptions and write the answers,” Chadha says with a grin, adding he was a frequent visitor to the Hanuman temple near his college to curb the “volatility” in his exam marks.
Chadha also learnt quite early in life that it’s diligence and focus that differentiate excellence from mediocrity. That lesson helped him top class XII board exams at the all-India level, even though he was in the last quartile in a class of 47 students in his XI grade at St. Columba's School, Delhi. At IIM, it was the other way round — he was among the top few in the first year, but came 123rd out of 180 students in the second year.
“The biggest revelation for me at IIM was to see how some people can be so incredibly bright. It can be a real humbling experience,” Chadha says, as his BMW waits on the driveway. Some of his friends may well be returning the compliment.