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Interview with Chanda Kochhar, Managing Director and CEO of ICICI Bank

Aired August 17, 2012 - 05:30:00   ET



MALLIKA KAPUR, CNN INTERNATIONAL CORRESPONDENT (voiceover): Welcome to the heart of Mumbai. It's India's most populous city and the home of the country's largest private bank. And this is the woman holding its reigns.

Forbes Magazine counts her among the world's most powerful women. One of this homegrown star's many accolades.

KAPUR: So, this is it? The corner office?


KAPUR (voiceover): Meet Managing Director and CEO of ICICI, Chanda Kochhar. Starting as a trainee in 184, she soon took on the bank's corporate sector. Just five years after kick starting the retail business in 2000, ICICI emerged a leader in this segment.

SONIA GOLANI, AUTHOR, "CORPORATE DIVAS": When she became the MD and CEO, she was just 47 years. So there are long years lying ahead of her. And with the kind of tough-minded attitude that she has - the kind of temperament she has - that no crisis really bogs her down.

KAPUR (voiceover): But, it was her foresight before the 2008 financial crisis that helped elevate her to the role of Chief Executive.

Today, ICICI is growing at the healthy pace of 20 percent a year. But even with a company worth $119 billion, Kochhar still has her sights set high.

KAPUR: Your goal is to make ICICI one of the world's top 20 banks. How do you plan to get there?

KAPUR (voiceover): This week, on "Talk Asia", we're in Mumbai to meet one of the country's most powerful executives and find out what it takes to be the woman in charge.


KAPUR: Chanda Kochhar, welcome to "Talk Asia". Thanks for being with us. Chanda, you're one of the most prominent people in the Indian business world. You're the MD and CEO of ICICI - a title you got when you were just 47-years-old. And that makes you the youngest person to hold that title and also the first woman.

When you were starting out, did you ever think you would have the corner office, today?

KOCHHAR: You know, I always believe that, as you start out, while you should have a big dream - a big goal - but it's also important to move step by step. So, you know, frankly, if you ask me, when I started as a management trainee in 1984, I don't know that I really thought that I would become the CEO. But what I always aspired, is that I would do better than the others.

KAPUR: And you're a real homegrown star. You were born and brought up in India. You were educated entirely in India. And, as you said, you joined ICICI as a management trainee back in 1984. So, you've been with the same firm all your working life. Did you, at any stage, feel like, "You know what? Perhaps I should try something else. Perhaps I should get different kind of experience elsewhere"?

KOCHHAR: I think the organization grew, evolved, diversified so much during that period that I always got the opportunity to keep doing newer and newer things and learning more and more. So, you know, while you may stay so many years, almost three decades, with one organization, but I think I've just done so many new businesses - so many different businesses - that there was never a dull moment.

KAPUR: You really made a mark in the business back in February in 2008. And, at that time, you were CFO of the company. The bank was growing at an astounding rate of about 30 percent a year. And then you did something rather strange. You told all your colleagues, "Stop. We need to pause. We need to reassess. And we need to be really cautious in the way we proceed". And, to put it in context, this was in a bank known for its ambitious and aggressive growth. What did you see at that time that the others didn't?

KOCHHAR: I thought two things. One is, I saw the global environment, you know, evolving and developing in a manner that there were just too many risks in the environment. And there was too many unknown risks in the environment. I think it was required, then, at one point in time, to kind of stop and realign our mix of assets and liabilities.

KAPUR: You called it "disciplined expansion". What does that mean?

KOCHHAR: What it means is that ultimately, we are a growth organization and we would be growing in the medium and the long term. But, in that immediate term, it was required for us to consolidate a little bit and get ourselves prepared for the next round of course.

KAPUR: That was a gutsy move, though, at that time. And one that probably eventually saved the bank, you know, millions and billions of dollars, perhaps. But then you had another crisis - Lehman collapsed.


UNIDENTIFIED MALE: It was a Monday morning like none other in the 158-year history of financial giant, Lehman Brothers. The company went bankrupt.

UNIDENTIFIED MALE: The most shocking part is that I don't think anyone really expected a bank as big as Lehman to, you know, be in a position that it's in now.

UNIDENTIFIED MALE: Some employees rushed in Sunday night to gather personal items. The Monday morning headlines scream to New York City what Lehman employees already felt.



KAPUR: Why was that a problem for you all?

KOCHHAR: While, actually, the Lehman exposure that we had was not even one percent of your total balance sheet, but you know, the unknown perception - or rather, the perception in the minds of the people was that this bank has a large international exposure. We don't know how the international financial sector was involved, and therefore we don't know what will be the impact on this bank, and therefore, are we sure whether our money is safe with this bank or not safe with this bank.


KAPUR (voiceover): Rumors were flying thick and fast that the country's second-largest bank was under stress thanks to the collapse of the U.S. financial system. 24 hours later, we revisit ICICI ATMs. The scene is starkly different from Tuesday. So what restored the confidence of the customers?

KOCHHAR: We continue to have a healthy capitol position - a healthy financial position. And will be able to meet everybody's requirements. And there's no cause to worry at all.


KAPUR: You really went out of your way to reassure investors that their money was safe.

KOCHHAR: The approach that we really took was to be patient and calm and to explain to every stakeholder, even if it meant, you know, saying the same thing over and over again. And saying it with different levels of sophistication so that, you know, that stakeholder could relate with it.

Because, if you saw at the ground level, there were many of our branches where there were probably hundreds of people gathering in front of the branch manager and wanting to withdraw their money. So there could have been a [UNCLEAR] situation. But, you know, it was me, as a leader, that I had to really convey that calmness to them and tell them that, you know, we -

KAPUR: We've got it under control.

KOCHHAR: -- yes. We've got it under control. We'll supply you as much cash that you need. And the second is, don't run away from them. Actually call them. Make them sit. Give them a glass of water. Then explain to them and then do exactly how or what they wish to be done. And I remember some of our branches were open 'til, you know, midnight - one in the night - because I told my branch managers, "Don't turn any customer away".

KAPUR: Logistics - you had some very interesting logistics. I read that you had to get armored trucks full of cash to ferry money - cash - to the ATMs?

KOCHHAR: Yes, we had to, because, you know, ATMs are spread all over India, which is, you know, in geographical terms, it's a vast spread.

KAPUR: Sure.

KOCHHAR: And we needed to, kind of, overnight garner the cash, so to say. And transport it all over. Because I did not want, at that point in time, any of my ATMs to run dry, you know, of cash. So, it -

KAPUR: Because that would have created a panic if it did.

KOCHHAR: Avoid the panic altogether.

KAPUR: Sure.

KOCHHAR: So, you know, it was, in a way, a backwards calculation to see how much cash, you know, should really be stuffed in the ATM. From where should we take it out from our vaults? How should we move it across the length and breadth of India? And can we actually get the armored vans or not? And then, you know, some cash moved in armored vans and some cash just moved in cars in, you know, open boxes and ATMs were stuffed.

KAPUR: Just have to do what it takes, right?


KAPUR: In a way, it was a very grass-roots solution to the global crisis.

KOCHHAR: Absolutely. Absolutely, yes.


KAPUR (voiceover): Coming up, KOCHHAR tells us how she handles her competitors.

KAPUR: So, does that keep you on your toes? Do you worry about competition from them?




SANJEEV AGARWAL, MD, DYNAMIC RESEARCH AND CAPITAL MANAGEMENT (voiceover): Financial meltdown we had seen in 2008 actually never went away. The issues are really serious. And India, though it is a much better place than any other country in terms of growth metrics, it has some systemic problems. A high inflation rate which is consistently keeping [UNCLEAR] or supply-side problems.


KAPUR: Of course, in India, our growth has slowed and we are growing at the slowest pace in about a decade. The IMF has lowered growth forecasts for India. What do you think we need to do to swing the economy around?

KOCHHAR: See, India's growth drivers are actually two growth drivers. One is consumption, which arises out of our demographic advantage. And the other is the investments. Because we need a lot of investment in the country.

KAPUR: Sure.

KOCHHAR: Even as we speak, today - when we believe that, you know, the growth is much lower than what it has been in the past and could have been today - I think the consumption story is still ticking along. You know, as we add more and more people in the working-age group - people are aspiring, people are earning. So they're aspiring and they're consuming. So I think that advantage stays with us as we go along for the next few decades.

The investment part of the growth driver has slowed down substantially, currently. And I think what we really need to do here and now is to really revive the investment driver of growth. And, for that, you know, basically, I think we need to do two, three things, really, which are most important. One is to have a look at the set of projects that we have completed lately in the country. And make sure that they're last-mile approvals in terms of either their allocation to mines or environment approvals etcetera, come through. So that the projects become productive and start actually operating. That, to my mind, will change a lot of sentiment towards committing to new investment in the country.

KAPUR: How much of an impact do you think the Eurozone crisis has had on the Indian economy?

KOCHHAR: While, of course, you know, this is the interconnected world.

KAPUR: Sure.

KOCHHAR: So we can't say that whatever happens in the rest of the world -

KAPUR: Doesn't effect -

KOCHHAR: -- yes. So, in terms of what happens in terms of the ability of the corporates to borrow, the flow of funds, what happens to the dollar liquidity, what happens to commodity prices -

KAPUR: All that does affect us.

KOCHHAR: But a large part of, you know, what we can do in the Indian economy is still in our own hands. So, I definitely do not believe that this slowdown in growth that we have seen is entirely out of what's happening in the international economy.

KAPUR: We have some homegrown problems.

KOCHHAR: We have homegrown problems and we have homegrown solutions as well, if we decided to implement them.

KAPUR: Sure.

KOCHHAR: So, you know, always, whether you look at the glass half- full or half-empty. If I look at it as half-full, I would say there are a lot of solutions that are in our hand. And if we get those right, you know, we can still grow at much better rates than what we are growing today.

KAPUR: You know, in India, we are seeing state-run banks also grow very aggressively. Does that keep you on your toes? Do you worry about competition from them?

KOCHHAR: Well, in India, the banking sector has always been competitive. So we've had - ever since we actually got into retail banking or commercial banking - I mean, we've always had the state-owned banks that were already present. Present for decades and decades with, you know, huge brand - a branch network and so on.

Not just that, we've also had foreign banks. You know, competition has always existed in the Indian economy and the banking sector. I think competition is good. It finally delivers the best value to the customer and I think it keeps all the players on their toes. So, you know, we treat it as a part of our business life.

KAPUR: I've also read that a key priority for you - or, rather two key priorities - one is expanding into rural India and the other one is just the opposite - making your mark on the international stage. Can you tell us a little bit about you wanting to crack the U.S. market, for example - the world's biggest market?

KOCHHAR: Yes. So I think India and India's growth story is, you know, set across a very wide spectrum. The next growth drive will also come from the rural India - the small cities. It will also come from the fact that more and more global companies would want to do business with India.

So, on the international side, what you spoke about, you know, our focus is really two. But both of which is India-related. That is - Indian companies that want to do business globally. I believe that we should be, as a bank, able to offer them all the solutions that they need, even globally, because we are their main bankers here in India.

Similarly, you know, we are seeing huge amount of interest of global companies wanting to come and do business with India. And, you know, that is the end that I would say that, you know, we should facilitate their doing business in India.

KAPUR: And I know you have assets, now, worth about $119 billion dollars. About a decade ago, that figure was about 21. I know it hasn't been an easy journey getting here. Still, you're very ambitious. And your goal is to make ICICI one of the world's top 20 banks. How do you plan to get there?

KOCHHAR: You know, if you just look back two decades and look at where the Chinese banks were in their global standings - and then what happened to the Chinese economy and therefore the opportunity that the Chinese banks got to grow. You know, I feel similar would be the case for India.

As India grows and, you know, what is the GDP rate of growth - I think the banking sector can grow at least two-and-a-half times the rate of growth of GDP. And, you know, if the banking sector grows two-and-a-half times, we - now that we have made our balance sheets so much stronger - we can grow faster than the industry. So, you just apply that - you just be ahead of the curve. So that's how, you know, you will become more and more relevant, or bigger, in global terms.


KAPUR: Do you think women can have it all? Do you have it all?

KOCHHAR: Well, I think I have it all.




KAPUR: So, this is it? The corner office?

KOCHHAR: Yes, it is.

KAPUR: Where all the top decisions are made?


KAPUR: That's Pranab Mukherjee, now the President of India.

KOCHHAR: Yes, that's right.

KAPUR: So what award was that? I know, you've got so many it must be hard to keep track.

KOCHHAR: Well, it says, "India's Best Bank Award". So this was the award for the best banker in that year.

KAPUR: What year was that?

KOCHHAR: Two years ago, 2009-10. That's "The Economic Times Business Leader Award".

KAPUR: Oh, I love that picture.


KAPUR: And that's it, the window full of trophies? That's a lot of trophies over there.

KOCHHAR: It just shows all the hard work done by all the teams put together.

KAPUR: Is there any one that's more special than the others?

KOCHHAR: Well, I think to me, all are special. Because each one of them is a recognition of some kind.

KAPUR: What about the Padma Bhushan - India's highest civilian honor? Which one is that?

KOCHHAR: Yes. That's, of course, kept in save custody at home.



KAPUR: Let me ask you a little bit about being a woman at the top of your game. One topic that invariably comes up when to women chat - when two working women chat. And when two working mothers chat. You know what the topic is? Work-life balance. Do you think women can have it all? Do you have it all?

KOCHHAR: Well, I think I have it all. But I won't say that the credit for all that goes to me. I think the credit for all that goes to everybody around me. I mean, I have it all because my entire family is so cooperative. I have it all because my children did not whine and cry when I was not there. So, I think it's, you know, in a way, a two-way street.

One is that we women will need to realize that it is a huge amount of hard work. I mean, it's not -

KAPUR: Sure.

KOCHHAR: It's not easy to have it all. Frankly, you know, you have to give as much to the career that the career requires and, at the same time, you have to give as much to the family as the attention that's required. But it can be done, yes.

KAPUR: You know, in India, 40 percent of the workforce is made up of women. Yet, only about 11 percent of them hold positions like yours - that of a chief executive. What does ICICI do right? I mean, it's nurtured talent, it's got many women working for it at all levels. You're a wonderful example of what a woman can achieve. But also many of your women colleagues, over the years, have gone on to hold very high positions at other banks, for example. What is ICICI's secret?

KOCHHAR: It's a gender-neutral meritocracy. We actually probably do nothing very special for women. But what we do in a very special manner is to remain an absolute gender-neutral merit-based organization.

KAPUR: And I have also read that you recently said, "For a woman to succeed in the workplace, she needs to leave her womanhood at the door". Is this what you mean, then? Is this gender neutrality has to work both ways?

KOCHHAR: It has to, because, you know, once you believe that the next big responsibility, if you deserve it, should come to you - well then if that job requires huge amount of travel, requires late working, requires whatever dedication - I think you better give that to that job. Because otherwise you don't deserve it. So, I think it's - that's what I mean. That, you know, you expect a level playing field, but then give back to the job in the same neutral manner.

KAPUR: I want to talk a little bit about your management style. I know you've said that you like to take upon all the stress yourself, because you don't like it to trickle down to your team or to your employees. That's a lot of stress. Because you do have a very demanding job. How do you cope with it?

KOCHHAR: Well, first of all, you know, I think what I believe is, the leader has to absorb that stress, because otherwise, if it just keeps trickling down, then even the team would not be able to focus on the job matters at hand.

So, clearly, for an organization to move on, it is the job of the leader to be that sponge that takes the stress from inside and the outside. But, yes, I also think that, you know, stress is, in fact, just a reflection of your mindset. I mean, if you allow it to bog you down, it can bog you down entirely.

KAPUR: I'm always amazed, because you always seem very sort of composed and Zen-like.


KAPUR: Let's talk a little bit about your childhood. You mentioned you grew up in Rajasthan. I know that your father was a professor in a college. And you, throughout your schooling, you know, did really well. You topped your school, your college, your management studies, your MBA. Education was clearly a priority for your family, wasn't it?

KOCHHAR: It was. Because, in fact, you know, what my parents believed was that, you know, the best wealth they could give to us children was to educate us and, you know - give us that foundation.

KAPUR: Your father passed away, very sadly, when you were very young. Your were just 13, I believe. And then your mother moved the family here to Mumbai shortly after that. And you've often said she was your role model.

KOCHHAR: Yes, I think, you know, the basic qualities of tenacity, I guess I learned from her. Because what I watched was, for the first 13 years of my life, in fact, we were living in a small city called Jaipur where she was only a homemaker and, you know, basically playing the role of protecting us from the world challenges, in that sense, and looking after us.

And suddenly, with this change in circumstances, when she had really three young school or college-going children to look after. And really no family business to lean upon. You know, she said, "Well, I have a talent which may just be nothing else, but, you know, dress designing. If nothing else, I take up a job in that field".

And I think that we, at that very young age, she kind of gave us that confidence. I think, just showed to me that she adapted to the new set of environment and took that as a challenge and performed very well and emerged stronger out of it. Had she crumbled down, we would have all naturally crumbled down.

KAPUR: We spoke about your parents. Let's talk a little bit about your children. And I know you are a very private person. But I'm just curious - your children, what do they think of what you do? And are they very proud of you?

KOCHHAR: I think they are. I think they definitely are. They're always very, you know, proud and happy of my success.

KAPUR: Supportive.

KOCHHAR: And very, very supportive. I just think that they deserve a lot of the credit of whatever I have done. Because it's only because they are what they are that I have been able to focus on my work.

KAPUR: That's great. Well, thank you so much for your time.

KOCHHAR: Thank you.

KAPUR: It's been a real pleasure to chat with you.

KOCHHAR: Thank you.