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the 2009 wharton india economic forum
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titled india the road ahead took place
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in philadelphia and brought together
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CEOs of leading indian companies
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investors heads of nonprofit
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organizations sports celebrities and
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bollywood stars to discuss where india
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is headed in an age of economic
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uncertainty Indian knowledge at Wharton
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brings you one-on-one conversations with
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these leaders thank you very much for
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joining us today to begin with how has
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the global economic crisis affected
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ICICI and also Indian banking in general
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well actually we must remember that
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while in the Western world the crisis
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really started from the banking industry
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and spread to the real economy in India
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actually the banking industry is very
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very robust and sound so in India anyway
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what's happened is that because of
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whatever US happen globally there is
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definitely some impact on the economy
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and it's that impact on the real economy
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that probably has some impact on the
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banking industry and not the other way
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around
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so what's happened is that export demand
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has definitely come down so that's led
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to lower capacity utilizations fraud the
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Indian industry and clearly the flow of
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capital funds into the Indian in the
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Indian economy has gone down
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substantially which has meant that a lot
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of investment plans having a way got
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differed what these things meant that
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there is some strain on the banking
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sector more so to say that liquidity in
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the system is you know kind of quite
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tight so one has to make sure that
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liquidity continues to get managed
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properly and the second impact was that
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the banking sector has to be then very
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very proactive in terms of looking at
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the quality of his assets making sure
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that the corporates tide over this time
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where the capacity utilizations are low
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inventories are getting marked to
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markets and you know the profitability
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levels are coming down a little bit but
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beyond that as I said the banking
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industry is actually very very robust
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you know what factors would just say
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helped really buffer at the
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history when the banking industry and
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other countries are just floundering
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what what actions or elements have
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buffered the industry in India
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the inherent structure of the banking
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industry is very different in India to
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start with I would say that the lending
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standards of the banking industry in
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India were very different we always in
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India have leant against incomes of
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individuals or incomes of corporates so
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an individual may decide to buy a home
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of whatever value but if he or she
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doesn't have the income to support it he
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would never have got loans to buy that
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home so we did not have the no interest
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no installment kind of loans we did not
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have the no income cheque loans we
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really had simple plain simple mortgages
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which were lent on the basis of whatever
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income the person was earning so the
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lending standards were very different
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and therefore it means that even today
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as long as a person just continues to
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hold his job he's able to meet the EMI
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is required to service the mortgage loan
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so that's that's one part now the second
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is that the leverage levels of the
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Indian banking industry have been much
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lower compared to the Western world and
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we in India are operating at capital
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adequacy zuv more than 12 or 13 times
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which means our leverage levels are
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pretty low the thought is that in India
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we never had these very complicated
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derivatives or SIV structures so it was
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plain simple lending basic lending and
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at low leverage levels and I think the
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last point is that in India again
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actually as per regulations the Indian
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banks are supposed to put in more than
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30 percent of their monies in Government
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of India securities or cash kind of
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assets so 30 percent is really kind of
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in the most safest form of you know
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deployment of money and that just means
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that the the quality of the assets is
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very good and it worked Lobo or even
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domestic trends do you see that could
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possibly threaten the industry I think
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whatever of course happens to the real
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economy will you know in a way impact
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the banks so if our customers see a
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slowdown in their demand pickup or see
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therefore a lower capacity utilization
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which they are seen currently
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many industry especially the ones that
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were kind of export-oriented
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then it does mean that the banks have to
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either manage the quality of the assets
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very well and be with the customers to
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tide over this issue so I think that's
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one the second is some banks which had
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global operations do then get more
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impacted because of whatever is
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happening globally so for instance some
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banks like us had some investments
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globally because we have a very large
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global operations then even if those
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investments are in triple-a assets
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because you have to mark them to market
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you know the wave spreads move in the
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market you definitely then tend to take
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some of that impact well let's just
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change our topic here for a moment cuz I
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think a lot of women a lot of our women
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readers would be very interested to know
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how you've charted your career and I
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mean you began I think in 1984 as a
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management trainee you were named to the
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I think 25th and fortunes list of most
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powerful women in business in 2008
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you're going you've been named the new
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CEO of ICICI and I believe that
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transition is happening in is it April
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or May 1st of May 1st of May so you know
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going from a management training in 1984
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in India to the head of a you know one
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of the largest banks in India what what
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challenges did you face as you as you
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progress through your career well I
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think it's been a very exciting and a
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challenging journey no doubt about it I
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think when you talk of a career span of
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25 years the way I look back I feel that
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you know as as I spent these 25 years
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the organization also really transformed
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and grew substantially we were a very
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small development financial institution
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25 years ago from there we are today the
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second largest bank in the country and
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and a very large financial services
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group which meant that there were a lot
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of opportunities for people based on
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merit and as I spent these 25 years we
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as an organization went into commercial
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banking into retail bank
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in infrastructure financing and and you
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know into international banking and
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somehow you know I was able to really be
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a part of most of the new initiatives
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that that was set up by the organization
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so it's partly the fact that you know
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there there was growth in the
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organization that gave me opportunity to
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prove myself the other thing was that of
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course there is no substitute to hard
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work so as opportunities came along of
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course you had to work hard to prove
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yourself and learn from those
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opportunities and evolve as a person as
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a woman especially starting your career
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did you feel you had to work harder to
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prove yourself I think in a way a woman
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has to work harder I don't know whether
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to prove ourselves or not but one has to
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recognize the fact that a woman is
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literally living 48 hours out of 24
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hours because you know you're just not
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managing your career you are definitely
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managing your family as well so in that
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sense I think in any case you'll end up
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working much harder but once you kind of
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decide to do that and once you make up
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your mind now and once you believe that
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you can do it I think you then land up
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land up doing it and what's important is
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that as long as you know the the
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opportunities come along your way on the
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basis of merit and without any biases of
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gender then I think you know you can
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work along and and make the best out of
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those opportunities do you perceive that
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there are still some hurdles for women
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in business who would like to start out
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in business in India and if so what are
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they yeah I would think that in the past
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25 years of course things have changed
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tremendously when I started working I
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don't think one could even imagine at
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that point in time that women would lead
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very many large organizations but I
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think today even socially there's a lot
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more acceptance that women actually
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would have their careers it starts from
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the parents who themselves want their
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daughters to have their own careers I
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think then again when when people get
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married you know the husband's or the
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in-laws again accept this very nicely
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that that
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that the woman in the house will have a
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career so I think socially there is much
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more acceptance and again you know the
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biases and the minds of people in terms
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of there are only certain things that
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men can do and there are certain things
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that women can't do I think in a way are
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becoming less would I say that it's
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become absolutely and even world in
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every organization it may not have as
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yet now but I think things are changing
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substantially and does ICICI fund women
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entrepreneurs or if they do to what
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extent do they find them see ICICI has
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always been a gender-neutral
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organization so have I even talked of
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funding women or not even you know the
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fact that there are so many women in the
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IC I see a group and doing well I guess
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the appropriate way to phrase the
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question is to what extent do you do
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have statistics on the number yes so the
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statists because we don't do anything
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special for women but we are in a very
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special because we do not keep any
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gender biases in our mind so you know
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when it's an intrapreneur we go by the
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merit of the project when it's an
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employee we just go by the merit of the
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employee we actually are blind sighted
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to whether the person is a man or a
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woman do you feel like a factor in some
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other organizations that there is sort
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of a gender bias when it comes to
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funding I don't I would not want to
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believe so I would not want to believe
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so but you know if you look at our own
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organization you know if we are thirty
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six thousand strong employee base and of
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that 33 percent of women so we have a
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large women employee base who are doing
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well in the organization you do find a
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number of women ventures because you
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were as you say gender blind that sound
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are there any particular success stories
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that you would note yes if you have
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heard of you know Kiran Mazumdar the
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biotech company in India that that was a
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company that started with our you know
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private equity venture fund kind of you
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know kind of Association many many years
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ago when when you know it was just in
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the kind of a seed capital stage so
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there are you know many of these
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celebrated cases in that sense which
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have become
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bigger on the other hand there are many
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which may not have been known as yet but
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now you know many women entrepreneurs
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are doing very well in the German
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jewelry business many of them are doing
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very well in the tourism business so we
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have a lot of the you know the
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initiatives that women are running which
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have been funded by us and what advice
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would you give to an entrepreneur who
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was approaching the bank for funding
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yeah I think I mean always I would but
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especially in the current times I would
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say that the first important thing is to
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start with a structure which is very
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robust by which I mean that it should
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have a very good and a sensible mix of
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debt and equity because it's always very
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tempting to start with a heavily debt
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oriented structure because you have to
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put very less but I think when you're
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starting a venture you have to plan for
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you know certain uncertainties and if
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you stretch yourself right from the
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beginning with a heavily debt oriented
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structure then you're not able to kind
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of manage the course if things kind of
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don't move in the same way as you had
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planned but if you start with a little
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conservative debt equity structure gives
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you the ability to kind of stablish your
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base and once you do that then you can
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take on you know more kind of data
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oriented structures on top of that and
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what general advice would you give to
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women who want to start in a career like
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yours what should they keep in mind the
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most important thing that they have to
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keep in mind is get take out any
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inhibition in their own mind you know
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most of the time I think it's more an
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inhibition in the minds of women to say
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oh but I'm a woman I have to run my
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family so I will not be able to you know
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make a good job out of my career or that
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oh if I fall our career I'll have to
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ruin my family life well I think that's
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that's not that's only an inhibition to
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start with as I said you know once you
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believe that you are equally strong and
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you can do both and you make up your
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mind to do both then it's a little hard
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work it's not a it's not a cakewalk but
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if you make up your mind I think you can
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do it so the first important thing is to
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start with self-confidence and that is
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what gives you the basis to then keep
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moving forward and what's the biggest
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challenge from your
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or another both well the challenge is
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that as I said it means you are working
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much harder it means you have to
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organize your time much better it means
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you have to prioritize your time much
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better it means you have to sometimes
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give up some things if you are in the
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most important meeting in your office
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you will have to give up a parents
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teachers meeting that's taking place
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somewhere else and somewhere sometimes
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the other way round so I think you have
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to set clear priorities for yourself and
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the priorities change every day because
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something is more important at a certain
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point in time so I think it means all
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that handling all that but at and also I
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always believe that you know in fact
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women if they want to grow on the basis
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of merit they should never expect
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anything special I think once you
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believe that you want to rise up in the
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organization then you have to be willing
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to give as many hours of work as the job
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demands as much of travel as the job
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demands because then you cannot say oh
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but I'm a woman I'll do only this so I
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think you have to actually given as much
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as the job demands and as much as it
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takes to do you know to look after your
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family but once you as I said you have
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to make up your mind and then try and do
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that right and well clearly you work at
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many hours a day what do you do for fun
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when you find the time to enjoy yourself
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well whenever I find the time my biggest
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one is to spend time with my family I
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don't think I really actually find fun
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if I have to put myself away and say I
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want time for myself I think there is so
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very little time that I get with my kids
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that I really enjoy each and every
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moment of what I get with it well thanks
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very much for talking with us today
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thank you
