Search the Internet          Tips  Sites: Finance, Investment

ICICI's Kamath turns dream into reality

K Vaman Kamath has been making waves in India's staid banking industry for years, by exploiting technology to snip through snarls of red tape.

Now he's poised to lead a revolution, having taken the first step this week towards setting up India's first one-stop shop for financial services.

On Thursday, Kamath engineered the merger of ICICI Ltd, the financial services company he heads, with ICICI Bank, India's largest private bank.

The merged entity will be India's second-largest bank, with Rs 950 billion in assets. It will also be the nation's first universal bank, or supermarket offering all types of financial services.

The new bank will be run by Kamath, who over the past five years transformed ICICI from a bureaucratic long-term lender to big companies, into a 'virtual universal bank' providing home, auto and personal loans, credit cards and insurance.

When Kamath took control in 1996, he was quick to realise the power technology offered to help him get ahead of competition. He also pushed the company into new fields like Internet banking, e-broking and private equity financing.

"I never get tired," Kamath told a newspaper recently.

"I take vitamin capsules everyday and they give me tremendous energy. The pace at which I work today is scorching, one-and-a half times more than what I did in the eighties. All of us here work on a 12-hour module."

RETAIL VIA MERGERS

Kamath, 53, originally joined ICICI in 1971, equipped with a degree from the prestigious Indian Institute of Management, Ahmedabad.

In 1988 he joined the Asian Development Bank to handle projects in China, India, Indonesia, the Philippines, Bangladesh and Vietnam.

Kamath came back to ICICI in 1996 as chief executive officer.

He quickly drove through a series of mergers and acquisitions that converted the company into something closely resembling a universal bank.

In 1997, ICICI took over and merged itself into a shipping financer, SCICI Ltd.

That was followed by the takeovers of ITC Classic Finance, which had a strong retail base in eastern India, and Anagram Finance, which had a strong presence in the western region.

Early this year, when ICICI Bank took over Bank of Madura, expanding its reach in southern markets, ICICI owned 56 per cent of the bank.

The acquisitions gave ICICI a strong retail and investor service franchise, beside its corporate banking operations.

Simultaneously, Kamath also set up a host of subsidiaries in areas ranging from life insurance and general insurance to infotech and e-commerce.

That scorching pace of expansion needed capital, and ICICI tapped the New York Stock Exchange in September 1999, becoming the first Indian company to list there.

ICICI Bank followed suit, listing its American Depositary Receipts on the NYSE in August 2000.

LEADS BY EXAMPLE

ICICI insiders say Kamath, an engineer by training, leads by example, working as hard himself as he expects subordinates to.

Others describe him as aggressive and ruthless, and say he openly expresses disdain for those he views as unprofessional.

He is known as a tough taskmaster, a reputation enhanced by the turnover in ICICI's upper and middle management, and his brusque dismissal of that issue.

"Everybody is on a fast train, and at periodic intervals the train stops," Kamath said in January. "At this point, people who are not going to make it get off, and new people get on. This is happening in ICICI."

YOU MAY ALSO WANT TO READ:
S&P says ICICI merger beneficial
ICICI, ICICI Bank merger to create powerhouse

Tell us what you think of this report