Chapter 11J: There are two Padma Bhushan’s in Indian banking. KV Kamath of ICICI and Deepak Parekh of HDFC.
ICICI is Indian. HDFC is an arm of Citibank. There are three other large Indian private banks. Axis, Kotak and IndusInd. The rest are too small to matter. Then we have the real banks – SBI, PNB and BoB – the sovereign banks of India.
ICICI is an organically home grown bank. HDFC was grown inorganically. By the time the Congress govt bowed out in 2014, HDFC had already acquired most of the small players. Things had changed after 2014, more so after 2016. Havala Banks had no business case. They were now sitting behind home grown (actually self grown wonders) like HDFC. Emerging shadow banks had been eliminated. Citibank had strong ties with the Hindujas. So much so that Citibank was a promoter entity. So IndusInd was already part of the family. That left Kotak, ICICI and Axis. Kotak was on a trajectory of their own chasing profits over growth. RBI had been pursuing them to remove the promoters and bring in professional management. And the only professional management they could find was Ashok Vaswani, a seasoned Citibank hand from Dubai. I knew Ashok in the mid eighties – he has a mind of his own and will go about his work as he deems right. Unlike most others, he is Tier 1 Mumbai and independent of the Gujrati ecosystem between Kalbadevi and Haji Ali.
ICICI had been completely defanged with Chanda’s exit. Shikha Sharmas term had been pre terminated with fears of mounting NPAs among others. The timing was just right for the Citi HDFC duo to make their next move. The takeover of Axis. In India, control matters and like they say “possession is 99% of law”. So swiftly and accurately – HDFC insurance head was glided into Axis as the CEO with helicopter support provided by Citi. And ground support by Deepak Parekh.
The idea was to use the treasury of Axis to buy out the assets of Citibank for cash. After the Rs 6800 cr profit from HDFC to Sabre Capital, it was now time for a Rs 11,800 crore payout.
Axis did not buy Citibank NA India.
Axis became part of the Citi HDFc cartel.
