In an interview with Moneycontrol in March this year, Shyam Srinivasan, Managing director and Chief Executive Officer of Kerala-based Federal Bank said he always wanted to be a banker. But, his first job wasn't as a banker.
Srinivasan ended up at a technology firm—Wipro— for his first assignment. “After I finished my IIM, I went for a Citibank interview in 1988, and because I had done my summer project with Wipro, I already had a job in hand," said Srinivasan said recalling his early days.
"I didn’t get the Citibank job after the final interview, so Wipro became my default option. After a year, I joined Citibank. Always wanted to be a banker.” Srinivasan said.
Srinivasan is among the few foreign bankers who chose to move to smaller Indian banks after fairly long, successful stints in foreign banks (the others include RBL Bank’s Vishwavir Ahuja and DCB Bank’s Murali Natrajan).
Over the last one decade, Srinivasan has been at the helm of Federal, the bank has transformed into a mid-sized private bank with strong focus on retail business, including gold loans and funding small and medium entrepreneurs. The bank’s image has changed over the decade from an ‘old generation’ (Srinivasan doesn’t like the term 'old generation bank') private bank to a mid-sized private bank with strong national focus.
In Srinivasan’s own words, through whichever lens one looks at Federal Bank today, the lender now compares with a new bank. "We have now moved from the small to medium bank category. I guess people are now realising that we are no longer the ‘old bank’,” Srinivasan said.
Srinivasan makes an interesting comparison of the bank’s transformation over the decade with Ayurveda (the medical practice originated in Kerala). “Ten years back I said we will be like Ayurveda which is the world’s biggest and most popular exports from Kerala. Nobody calls Ayurveda a Kerala (medicine system) today. But, it has its origins in Kerala. I would love to be the new Ayurveda of the world. Federal Bank was born here but we are growing up in India,” Srinivasan says.
Srinivasan steered the bank in a steady growth, rather than going for quick aggressive growth which proved fatal for many of the competitors. In 2012, Federal Bank began de-bulking its book and in 2013, the lender stopped depending on bulk deposits. The bank has about 93-95 percent of the liability on the retail side now. Over the last seven, eight years, each passing year, Federal Bank became more retail-focused on the liability front, says Srinivasan. Srinivasan also brought in changes on the expansion strategy of the bank by focusing on digital channels instead of physical expansion.
“When I joined the bank, I added 600 branches in five years. In the last five and half years, I have added only 20 branches. In 2015, we stopped adding and our mantra became—branch light and distribution heavy. I believe branches should become more productive,” Srinivasan said.
This year, Federal Bank may add 17-18 branches and about 30 next year, as per the plan.
How does he want to position the bank going ahead—as a retail bank? “The strategy is adapting to different models depending on the environment. But, certainly, we focus on 2-3 things. We want to be the most admired bank, digitally enabled for micro, small and medium establishments to bank on. That is the vision statement of the bank. Middle India has a huge opportunity ahead,” Srinivasan said.
Srinivasan’s current term is ending on September 23, 2021. The bank has sought for an extension for the CEO for another three years. Going by the RBI’s new norms for CEOs, Srinivasan, 59, can serve up to 2-5 years with RBI permission. Srinivasan is ready for another innings to continue the 'slow and steady' approach in Federal Bank's growth journey. “If I make a comparison, in the sporting world, I respect Rahul Dravid (cricketer). That’s the kind of profile we want to be,” Srinivasan says.