KV Kamath relives his triumph,'08 crisis; bets big on India

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KV Kamath relives his triumph,'08 crisis; bets big on India

India’s most famous banker, KV Kamath, the Non-executive Chairman of ICICI Bank, a man many would call the father of Indian retail banking, gets candid on his journey so far.

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Q: How coupled are we to the global economy?

A: We are coupled to the extent that today that the market place is coupled the commodities are priced for a global system and so would be your foreign currency, certain food items would have benchmarks globally. So we are connected, but I would think a large part of the Indian economy is decoupled because whatever we may say a domestic facing economy and we have been one and it is good that we have been one and that's what I would like to drive as the key points of India.

Q: How decoupled can we be if a crisis of even half the magnitude of year before last hits the global market?

A: We now have a benchmark, we now have had a crisis which was probably the severest in 70 years and we really came out unscathed. What did we loose? We lost about 1.5% of growth say max 2%. So if we have a crisis half the magnitude of last time, I would think it to be a glancing blow to us in terms of GDP loss, nothing serious.

Q: Where is a feeling that we came out of this crisis unscathed because we were and especially the financial sector was largely under control, so let's remain that way and let's go a little bit that way, is there a worry that it could come that way?

A: I don't agree with that hypothesis at all. I think we came out of that because the government certainly took proactive steps to support the financial sector and to support industry. The government relaxed a whole lot of lending policies, the government created liquidity and monetary authorities were completely in sync with the policy initiatives that were required, so there was timely action. I think that saved the day for us and the stimulus that was given particularly to the poor, to rural India again helped in the process. So I would give very high marks to the government for being absolutely on the ball, I would love to say proactive, but this problem was already on us. They acted at speed that anybody could have acted at, so I give full marks to the government for having delivered what was required during that crisis and I think that is what we should celebrate.

Q: When this crisis happened, you were also going through a change in the bank, you were in the process of handing over the baton to Chanda, was there any temptation on your side or from the stakeholders or boards perhaps saying hang on a little longer and guide us through a little longer?

A: I can speak for myself, there is absolutely no hesitation for a very simple reason, I was very clear about the health of the bank and I was very clear that we could tide over any challenges that we had. I was equally sure that we had a good leader to lead the bank going forward, so there was no question in my mind of relooking at the decision.

Q: There was no nervousness on her part?

A: Not at all.

Q: People who know you say that you are a good student of the sport and that you have often predicted winners based on track record, the car, on the track, Mr Karan Chandok is our second F1 racer, how do you think he will perform, you think he will do better than Naren?

A: A lot will depend on how the car behaves as nobody knows anything about the car. The car has not yet been tested, so I don't know where it stands. Even in the last season, if you see the difference between the top 12 cars it was less than half a second in most of the races. So that being so, a completely untested car where nobody knows anything about it, I think that's going to be the biggest challenge. If the car performs, I am sure he will do well.