To Her Credit

Zarin Daruwala, Pres­i­dent, ICICI, on be­ing a banker for the fu­ture

India Today - - CONTENTS - By OLINA BANERJI

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.

Styling by Gul Garg; Make- up by In­glot; Lo­ca­tion cour­tesy: Tri­dent Ban­dra Kurla, Mum­bai

Power Play: Daruwala at work

Mother Fig­ure: Daruwala with her chil­dren Diana and

Cyrus on hol­i­day

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