An obedient son of an army officer, he enrolled for an engineering course in deference to his father’s wish. But after completing that, he opted for a career in banking, a choice that surprised many. After 35 years of dealing with intricacies of debit and credit, the astute banker now leads a promising new generation bank. Meet Romesh Sobti, the MD and CEO of IndusInd Bank.

The long winding career path, which began at State Bank of India in early 70s, wounds its way through multinational biggies like Standard Chartered Bank and ABN AMRO, before Sobti took over the reins at IndusInd in 2008.

In an interview to Moneycontrol.com’s Saikat Das for its fortnightly feature CEO Spotlight, Sobti--a pragmatist true to his profession--spoke about a wide range of topics from father-son relations to the role of friends in life.  For him, work-life balance is a relative term, wherein no clear-cut segregation would be possible between office hours and life at home. And the thought of retirement has not yet crossed his mind. 

“As long as long as I have the energy and the drive to run the organization, I am not going to retire. The day, I feel that I do not have the energy and do not enjoy coming to work, I will leave. But as things are today, I am going to be around for some time,” said Sobti.

Below is the verbatim transcript of the interview. Also watch the attached video. 

Q: From State Bank of India to IndusInd Bank via two foreign banks, you have spent 35 years in the banking industry. How has the journey been?

A: Having worked in all the three spaces of banking (the public sector, private sector and the multinational) you really begin to appreciate where the three perspectives really come from. So you look at State bank of India that was very solid and most valuable grounding that I got. Grass root banking, working in the rural areas that give you an appreciation of the fact that development banking is essential. Today we talk about the role of the public sector and we talk about some degree of inefficiencies but we forget about the developmental role that the state owned sector has played.

The multinational is another perspective. It is the latest in banking. They brought in technology and products. They taught us retail lending starting with auto loans by one foreign bank. So, that gave you a different perspective of relationship management on the corporate side and retailing on the consumer side. IndusInd bank is a private sector. I have always believed that the private sector banks are the best of both worlds. So they have the branch expansion and the reach of the state owned banks eventually.

On the other side they have the ability to bring in the best of technology and products so it is like a bridge between the two. I have enjoyed every part of this journey. Every part of this has contributed to the making of myself. And people ask me what is the difference among the three sectors and I think there is no difference. In the sense the products are the same. You sell the same products through the same sort of distribution. It is only difference in approach.

How do you approach profitability, productivity and your people? How do you incentivize your people? The approaches are different basic banking remains the same.

Q: You took charge of IndusInd bank in 2008. What were the issues that time and how did you resolve those? 

A: The issues were many fold. The bank has been around for almost 15 years and by the time the management change happened, it was seriously impaired in terms of its capital, the quality of its book and its earnings, the quality of its people and infrastructure. So it was an impaired bank although the bank never made a loss to be fair.

Therefore, it was a turn around situation for us. The basics were there to be fair but we had to recapitalize. That happened within three months of the management change. We had to reorganize the bank into client and product segments. So that people had ownership of products and clients. Then, we had to restructure the balance sheet so while we were the highest cost borrower and the lowest cost lender in the market. Therefore, you had the lowest net interest margins. So each item of the balance sheet it was addressed.

Then, why don’t we have savings in current accounts? What is the action plan for that? Why are we not lending to better quality corporates? So, there was an action plan for that.

How do we manage our investment book? There was an action plan on that as well,  the restructuring of the balance sheet. Fourth element was re-talenting the bank. Ultimately you cannot have the best product and services – if you don’t have good quality people. So, re-talenting the bank was our first point of arrival. Finally, re-infrastructuring the bank...it means technology, infrastructure, premises, processes, operations, compliance audit that you do. The basics were there; you only had to elevate them to a higher level. So, it has been a three and a half year journey of restructuring along those four or five lines.

Q: What is your vision for the bank next 5 years? 

A: In these times, a five year vision is very dangerous. Having a three year vision is also taking a punt because things change every three or six months. You must have a steadiness of approach. So clearly our vision remains that we will be a universal bank. We will do all products and all services because we believe that all products and services done sensibly should make healthy earnings.

We have a vision of being the most efficient distributor in the country. That’s a very clear objective and we are on our way of being that. We certainly have a vision of being very technology oriented bank and we have used technology to find customers, to service customers and to engage customers.

The fourth element is to be amongst the most responsive banks in the country. Responsiveness is a new theme we adopted 1.5 years ago. The issue is that you have the best products, you have the best branch locations, you have the best people, yet you make mistakes that make customers unhappy.

So you have to respond to their needs and responsiveness therefore means getting it right first time around, resolving issues quickly, so I can switch from being a macro manager to being a micro manager. So style is really hands on. Every part of the bank, one must know at every moment what’s happening. Now that doesn’t mean that you don’t delegate, you delegate, but you still need to know what’s happening in every part of the bank, so it’s a hands on approach, but people have a freedom in deciding business models for instance or products.

I don’t interfere in the consumer bank’s decision to open a branch in Lower Parel (in Mumbai). That is his decision, but certainly one would want to see what are the assumptions behind that, so that’s the macro and the micro --- between the macro and micro, so there is a lot of freedom on hiring people, on fixing remuneration of people, on products to launch, on branches to open, so the whole thing.

So people have a feeling of entrepreneurship in the bank and that is very close to my heart also that they must all think they are entrepreneurs because all of us has come out of a templated environment of a multi-national bank. Multi-national banks do not have an entrepreneurship. It’s a templated what they call a cookie cutter approach. So here certainly, the style is entrepreneurial, but it’s hands on.

Q: What motivates you and how do you motivate your team? 

A: The whole team is driven by the creation of excellence in whatever they do. If you look at the top management team of the bank, they were all very successful managers mostly in multi-nationals. So why did they leave cushy glamorous jobs and come and do nuts and bolts business here?

I think it was a desire to achieve, to implement your beliefs that you have a belief in a certain business model. Here you got the freedom to implement that belief. Achievement and growth are the two terminating motives certainly I have and I see it in the whole team.

Q: Who are the leaders you regard highly? 

A: In the banking sector my hero was ex-chairman of the State Bank of India in 1973, Mr. R. K. Talwar. He embodied everything that I have valued personally. He had a fantastic relationship with people. I have seen it myself. He remembered people he worked with 30 years ago who were at the lower levels, plus his integrity, the basic value that you saw in R. K. Talwar was his integrity and he did not compromise that even though some political masters cost him his job because of that. He actually lost his job at the State Bank of India. So, that’s my hero in banking in India.

Q: Tell us something about your family and friends? 

A: I have a small family. I have two children: a son and a daughter. My wife is a homemaker, but she is involved in lot of work with the blind.

My son is now 31 years old and he is not a banker. He is averse that he will never do this sort of management thing. He is a Masters in telecom engineering. He is pursuing his course of action in life according to the way he thinks he should go about it. The father has a very little influence except that the father has funded him in his studies!

My daughter is also similarly well educated, but she is into child education. So both the children are now in a way independent. That’s the family.

Friends….. well, you have 100s of so called friends, but your really close friends can be counted on your fingers. So who is a really dear friend? I think, a dear friend is somebody without him you cannot manage your own existence. Those are three or four people whom I have grown up with it.

Some of them are golfers, some of them are businessmen so the friend circle is large, but lots of them are associates, lot of them will vanish once you leave the chair (pointing at his chair in his cabin). Only close friends will remain and those are three or four.

Q: How do you maintain work-life balance? 

A: This is a question which all managers face and personally I don’t believe in this concept of work-life balance. You carry your work home and you carry your home to work…that’s the way it actually happens in the real life.

So there is no clear segregation of work and life. Sitting in the office, I am thinking about my family and sitting at home I am thinking about my office, the work. It’s all fused together. This is idealistic to say once I reach home I forget my office, it doesn’t happen.

But you can achieve the balance by really doing things, which you do passionately. So even if you are sitting at home working on certain things, you do it passionately. Time well spent creates the balance because you spent your time well whether it’s at home or at bank. You are balanced.

So you don’t really have to create segregation. You don’t demarcate these things, whatever you do, do passionately and enjoy doing what you do. When I play golf, I enjoy, I am passionate about golf, it’s a great balancer for me, it’s a great stress beater for me. Or, you go to watch movies even if you see ridiculous Bollywood movies they are fantastic, stress beaters. Enjoy what you are doing and the balance comes.

Q: If not a banker, which other profession would you have chosen?

A: I would have been a literature professor. I am a very fond follower of English literature probably because my father is an MA in English literature and he left all his books around, which I read growing up through school and college. He did his masters while he was in service and was an army officer.

But in our generation, by and large parents decided what you would be. So my father said, he would be a doctor or an engineer, so I became an engineer. So my father said, he would be a doctor or an engineer, so I became an engineer, but from engineering at least I had the freedom to go into banking, I didn’t stay in engineering even for a day. So that choice was mine. The academic career choice was father’s.  

Q: What are your plans for retirement? 

A: First of all what does retirement mean? Retirement means that you stop a certain activity that you have done for the last 37 years. I have never thought of retirement per se, but I believe that as long as I have the energy and the drive to run the organization I am not going to retire. The day I feel that I do not have the energy and that I do not enjoy coming to work, I will leave. But as things are today, I am going to be around for a long time.  

saikat.das@network18online.com