To Her Credit
Zarin Daruwala, President, ICICI, on being a banker for the future
Much like herself, Zarin Daruwala’s office is a picture of calm. Sparsely decorated, her corner cabin on the top- floor of ICICI’s headquarters offers a sweeping view of the rain- washed, Bandra- Kurla complex, Mumbai’s fastgrowing financial hub.
Nothing about Daruwala, 47, suggests the level of responsibility she wields at India’s largest private bank whose assets totalled Rs 4,736 billion as of March 31, 2012. But numbers tell a story of their own. Daruwala heads the 800- employee- strong Wholesale Banking Group ( WBG) that controls 30 per cent of all assets and rakes in nearly half of ICICI’s profits, which in 2011 amounted to Rs 64.65 billion after tax. A key member of ICICI CEO and MD Chanda Kochhar’s A- team, Daruwala exudes the placid serenity of a zen master that doesn’t waver for a single minute during an extended interview. It’s only when she is asked to choose between saris during the photoshoot that a tentative look clouds her face. Clearly this is attention of a kind she is not used to. But when she speaks, in a voice so soft that one has to lean forward to catch it, everyone pays attention.
Entrusted with a portfolio that accounts for a little over 50 per cent of the bank’s bottomline, Daruwala today is a powerful influencer within the industry who enjoys her boss’ confidence and trust. “Zarin follows through with things, she perseveres,” says Kochhar, one of her many mentors, who as GM in 1998 plucked her from employee ranks and assigned her to a group focused exclusively on servicing corporate giants. “I was a natural at it,” Daruwala says, looking
back at those early days when she first made a mark due to the ease with which she managed to market the bank to clients.
Perseverance comes naturally to Daruwala, a Parsi, born and brought up in Mumbai whose parents placed a particular emphasis on success. “My parents wanted me to excel in everything I did,” she says. One of two sisters, Daruwala was the first chartered accountant in her family, who even topped her CA exams, thus opening up a whole world of career options. Banking curiously, was not one of them. “At the time, banking seemed like a more feminine field than engineering. Of course things are very different now,” she says. It took some prodding by former mentor Y. H. Malegam, an eminent chartered accountant, under whom she did her articleship. In 1989, Daruwala joined ICICI as a management trainee, inspired in part by its “woman friendly” atmosphere.
It’s no surprise that ICICI is the largest contributor of women who are nominee directors on the boards of other companies. Daruwala herself sits on the boards of JSW Steel in addition to ICICI Securities and ICICI Lombard. “It’s easier for women to succeed in banking than in other fields like manufacturing. Women typically do better in the service industry and that’s why we see so many of them break through the glass ceiling,” she says of ICICI’s expansive talent pool that’s churned out the likes of Shikha Sharma, Renuka Ramnath and Kalpana Morparia ( see box) to name a few. Her rather conservative view notwithstanding, Daruwala managed to notch up several wins for the bank, such as finalising India’s first securitisation deal with Citibank way back in 1990.
Daruwala’s journey began under Lalita Gupte, former JMD of ICICI. “I picked up a lot from her style of functioning. Gupte made sure that if you did your job well, you were recognised for it,” she says. In its early days, before it became a banking behemoth, ICICI was a small
‘‘ The key is to let those you lead buy into your strategy. You need to be able to convince them of your vision. I’ve always trusted every team I’ve led to execute my vision”
firm where seniors were accessible to junior employees like her. Within a few years, she was working in the office of N. Vaghul, then chairman of the development financial institution. After her marriage to Bomi, a lawyer, in 1992 Daruwala moved to the Delhi- based ICICI Securities group which was a joint venture with JP Morgan, the first of its kind in post- liberalised India. This stint gave her the confidence to deal with bond and public issues and mergers and acquisitions. But as the bank went into an expansion overdrive, responsibilities beckoned and she was summoned back to Mumbai in 1998 by Kochhar, by then general manager and a rising star in the ICICI firmament.
Over the next few years Daruwala plodded on, proving her mettle in various stints across departments. In 2002, she pushed the envelope and made a curious shift— from hardcore corporate banking to the relatively less developed field of rural finance. Without a guiding precedent, handling the banks’ rural portfolio was easily her most challenging stint. “ICICI Ltd had just merged with ICICI Bank and we had to meet priority sector targets. I didn’t know anything about the agri business and had to start from scratch,” she adds. Daruwala spent the first few months handpicking a team, including those who had expert knowledge of the sector. “We held training sessions every week to bring the entire structure into play. This included educating internal stakeholders, creating a client universe and building new rural products. It was daunting but exciting at the same time,” she adds. Within three years, not only was she able to build an asset book of Rs 75 billion and meet the bank’s priority sector targets but also created a group of 700 employees. Under her watch, ICICI introduced
the Kisan Loan ATM Card which allowed tobacco farmers in Andhra Pradesh to withdraw cash as per their requirements. Daruwala even turned around the loss- making branches of Bank of Madura which had been acquired by ICICI, before she finally returned to WBG as GM in 2005.
This rotation between different sectors has given Daruwala a unique understanding of the industry and helped to evolve her own style of leadership. By her own admission, she’s an informal boss. “I’m always approachable over the phone for my team,” she says, adding, “the key is to get people to buy into your strategy and then let them execute your vision. That’s how I’ve always managed my teams, even the ones I’ve inherited.”
Undoubtedly, it’s a lesson that she’s learnt from banking’s ultimate lady boss Kochhar, who took over in 2009 when the global economy was in turmoil. Kochhar’s appointment as CEO, by KV Kamath, did not go down well with the other ICICI stalwarts at the time. Post a mass exodus, Kochhar got down to work and employed a series of tough, albeit unpopular, strategies such as tightening loan books and putting into place strict lending rules. It wasn’t a smooth transition as she had to convince senior colleagues and employees about this sudden shift in company policy and attitude. It was during this period that Daruwala was called upon to deliver. She soon found herself in charge of the WBG which incorporates corporate banking, project finance, structured finance, financial institutions and syndications, government and PSU banking, and banking with MNCs. A year later, as president, she was put in charge of almost 4,000 demanding corporate clients. Daruwala is also the only woman on Kochhar’s allstar team. ( Since she took over, the WBG asset book has grown over 76 per cent, from Rs 750 billion in 2010 to Rs 1,320 billion in 2012.)
2009 was a tumultuous year and Daruwala reminisces about a particularly shaky moment that came right after the financial crash of 2008, when Lehman Brothers defaulted. Rumours about ICICI losing money were rife in the market even as customers queued up outside branches to withdraw their money. “I had to personally call on several high profile clients to convince them to stay with us,” says Daruwala. The run on the bank led to a difficult phase where within analyst circles, ICICI was jokingly referred to as the Non- Performing Assets bank of India. No one wanted to touch their letters of credit.
Then, as always when faced with problems, Daruwala turned to a higher power for strength. “Praying is my stressbuster,” she says, “I pray in the car, on my way to work, that the decisions I take are the right ones for the bank.” ICICI has since witnessed a remarkable turnaround. From an unassailable NPA ( non- performing assets) ratio of 4.6 per cent of total lending in 2009, they have managed to reduce their bad loans to 3.4 per cent of their portfolio. Even though corporate lending has seen a boost, Daruwala now ensures
that clients are vetted through stern guidelines to reduce their exposure to bad debt. A part of this restructuring also saw ICICI let go of its Kingfisher loans to SREI Venture Capital as the airline sunk deeper into debt. “Zarin’s real success lies in identifying the right investment and monitoring credit risk. We have calibrated our strategy in line with the changing economic climate and she has adjusted very well to this new pace,” says Kochhar.
Even as ICICI reclaims its place at the top, India is suffering from the double whammy of lack of economic policy making and a depreciating rupee. Worldwide, India’s reputation as an investment destination is slipping while capital inflows have dwindled. Daruwala is however standing up to the challenge. “The focus since 2009 has been on improving the net interest margin ( NIM), even if it means letting go of some business,” she says. It’s this confidence that has brought the NIM ( the measure of difference between interest income generated and interest income paid by a bank) over three per cent, fulfilling a major tenet of Kochhar’s turn around economic policy.
Daruwala, also in- charge of project financing, has now reoriented her vision to refinancing older loans instead of simply sanctioning new ones. “As a bank, they now have more control over how they are growing. It’s a smart move on their part and the strategy is working. ICICI has grown again in the last six quarters,” says Nilanjan Kafra, senior analyst, BRICS securities. ICICI’s 5C strategy ( credit, current account to saving account ratio, costs, credit quality and customer centricity) seems to have borne fruit then as the net profit for the bank in the quarter ending June 30, 2012 was Rs 1,815 crore, a massive step up from Rs 1,667 crore in the corresponding quarter last year.
While maintaining a focus on quality control and spreading credit risk is going to keep Daruwala busy in the years to come, government banking is another avenue that she is pursuing aggressively. Last year, she spearheaded a movement to make private sector banks eligible to handle government finances, and won the rights for three banks, including ICICI.
Despite travelling constantly to meet with clients across the country, Daruwala has managed to strike a happy balance between work and family. Her secret? “I compartmentalise my life and it works brilliantly. Five days a week I’m dedicated to the job. The weekend belongs to my children,” she says. Daruwala says that she spread herself thin when her children Diana and Cyrus were growing up, and confesses she couldn’t have managed without her husband’s support. “My mother and mother- in- law also helped us raise the children and I’m thankful for that,” she says of her support structure.
Despite being brought up near the sea, Daruwala prefers the mountains when it comes to taking a holiday. “The children and I love to ski,” she smiles. In her down time she watches Bollywood films but true to her placid nature, gives the violent ones a miss.
In a career spread across 23 years, Daruwala admits that her definition of success has evolved over time. With the re- invention of ICICI in its conservative avatar, it’s the more mundane targets of meeting quarter end predictions that matter. “That’s what makes me happy,” she says, “it’s not about the singular wow moments anymore.” It’s this stepby- step approach that’s catapulted Daruwala forward into positions of trust and responsibility. Looking out, from where she stands today, the future gleams with possibilities.