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    How top former bankers are taking a plunge into the finance industry

    Synopsis

    Financial services has long been institution-driven due to strict regulations. But many former bankers have taken the plunge.

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    From Jaspal Bindra, Gunit Chadha, Bhupinder Singh to R Sridhar here’s what former top bankers want to do as a entrepreneur in the finance industry.
    Financial services has long been institution-driven due to strict regulations, barring exceptions like Shriram Transport. But many former bankers have taken the plunge. Here’s what Jaspal Bindra, Gunit Chadha, Bhupinder Singh and R Sridhar want to do.

    On Evolutionary Path: Gunit Chadha, Founder, APAC Financial
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    Fifteen years ago when Gunit Chadha made a presentation to top Deutsche Bank executives as the new chief executive for India, he projected to take the bank’s India size to $1 billion. The number may appear peanuts in today’s context, but at that time it was ten times the bank’s size.

    By any stretch of imagination, it was an adventurous statement. But what drove Chadha was the belief in India’s potential after witnessing it first hand while running IDBI Bank, before it was merged into the Industrial Development Bank of India, the term-lending institution.

    Nearly two decades after returning from Citibank, New York, the 56-yearold Chadha is now wearing an entrepreneurial hat with about hundred crore of his own investment. He has founded a non-banking finance company, APAC Financial, which aims to lend to the underserved, self-employed individuals and small and tiny enterprises.

    Entrepreneurship is just not a flash for Chadha. It has been a desire that was kindled way back in 2000, when he joined IDBI Bank as the chief executive. About some distance from where Chadha was located in the then evolving Mumbai financial district was his former boss and icon – Aditya Puri, the founder CEO of HDFC Bank.

    “Is it possible to create something like what my former boss Aditya Puri started a few years earlier and is building?’’ says Chadha.

    “His persona had an influence on me.” But IDBI Bank being a ward of the teetering term-lending institution did not hold much promise. When the merger between the two was conceived, it was clear to Chadha that neither of the two would go far and he decided to pack his bags.

    While the seeds of becoming a businessman was sown in the mind, it was too early for a middle class working executive to take the plunge.

    “At that time, I didn’t have the risk capital but was dreaming about size and scale,” says Chadha. Also, “it was a question of whether without the calling card of Citi or Deutsche you can attract talent and build a business.” But why finance? “Because I know nothing else,” he says. “When you are raising external capital, the requisite skills make the difference.”

    Isn’t the finance world getting overcrowded?

    “It is a great opportunity in India. Be it structured finance or affordable housing. The industry also happens to be having a tailwind,” says Chadha. With scores of NBFCs dotting the financial landscape, what would differentiate his venture? Caution and values. “I have hired the head of collection much before disbursing a single penny in loans,” he says, highlighting the first principle of lending.

    Rarely does a conversation go without referring to the middle class value system acquired growing up in the military services background. But what about professional values? Who is the role model? “Uday Kotak personifies entrepreneurial excellence, and Aditya the professional,” he says.

    Return of The Native: Jaspal Bindra | Chairman, Centrum Capital
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    Entrepreneurship is often associated with brash and daring individuals. But when it comes to Jaspal Bindra, the chairman of Centrum group of firms, it is the opposite.

    For a globe-trotting banker for nearly three decades as an executive at Bank of America and Standard Chartered Bank in his hey days, Bindra has settled down for a life in congested Mumbai to begin a journey that has thrown up opportunities as well as challenges he had not encountered in the past. It’s a confluence of personal and professional interests.

    For the 57- year-old, it is not the burning desire to prove as an entrepreneur, but a confluence of events – the shrinking of the multinational bank universe, the crippling processes and systems at a time when India offered scope to grow – that made him take a plunge into business.

    “Foreign banks are no longer the best place to be,” says Bindra. “Regulatory changes and internal focus were overwhelming.” Bindra was among a handful of Indian bankers who rose to the top in an international bank. But thanks to the global financial crisis, the rules of the game changed and the bank shrank.

    Instead of starting from scratch, Bindra, the deal maker, saw an opportunity in Centrum, which had a solid platform but at the same time was trading at a discount due to market aberrations.

    “Rather than setting up anew and work for 2 to 3 years, why not leverage the entire period,” says Bindra. “It was a readymade shop that was available at a good valuation. It had a lot of runway.”

    What is the guiding principle behind his venture?

    “If you are paranoid about what you are getting into – you are watchful. If you get it right, you create a legacy.”

    Bindra is among the hundreds of individuals who made foreign nations their temporary home but are being lured back by the opportunities and also because of personal reasons, such as ageing family members to take care of and a budding film-maker son seeking to chart out his career path.

    “It was not that we migrated forever. There is also a little bit of family pull,” he says. His son Amrit (31), who had worked for Fox Studios, has set up his own establishment, which has drawn talent from across the world. The growth is such that he achieved in three years what took Jaspal Bindra three decades!

    When at Standard Chartered, it might have been heart breaking to see an international bank shrink; yet, the very adversity is what has turned the fortunes for him.

    “Foreign banks are vacating the space... PSU banks are vacating the space,” he says.

    In Footsteps of Kotak: Bhupinder Singh, CEO, InCred
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    Life in high finance is all about talking of billions of dollars in deals, moving the market and Italian suits. A corporate giant looking to come out of a hole in foreign exchange transactions and a budding engineer seeking a few thousand dollars in loans to complete his education, are poles apart.

    Bhupinder Singh, the 43-year-old former co-head of Deutsche Bank’s Asia-Pacific corporate banking & securities business, is looking to make a mark in Indian finance by lending to youngsters, who are looking to make a career by acquiring skills at Ivy League.

    Although he is from a business family in Bhopal, after graduating in management from IIM-Ahmedabad, he has been just flying in the world of global finance along with another Indian star Anshu Jain, the former co-CEO at Deutsche Bank.

    After roaring on the trading floors of Deutsche Bank with Ferragamo shoes and Hermes ties, Singh is now ready to ‘roll up the sleeves’ to leave a footprint on Indian finance with InCred, a non-banking finance company that lends to small firms, mortgages and student loans.

    “Growth runway in financial services has many more years to go,” says Singh, known as Bhupi in the financial markets.

    Unlike a Chadha or a Sridhar, for an investment banker like Singh to plunge into lending and recovery, the choice was a bit strange. But it is a conscious choice since the world of finance has transformed and India needed a different approach.

    “My industry has lost its mojo,” says Singh. “Big is beautiful is no longer the mantra.” How would someone who traded all his life with algorithms and derivatives could make the adjustment to the mundane task of lending to numerous unknown faces? Why didn’t he go for an advisory business, which would have been natural continuation of his previous roles and a lot less capital-intensive?

    “I consciously chose not to do that,” Singh says of advisory business. “I wanted to build a retail foundation. It gives you an extreme sense of satisfaction. This is a natural fit for me.” His belief in the India story is reflected in his own commitment to capital. About 35% of InCred is owned by him with an investment of around Rs 600 crore. What did his better half say when so much of money was at stake?

    “ You will have ups and downs,” she has said. “It’s all fine as long as you have some money in the bank for kids’ education.” His professional guiding spirit may be Anshu Jain, but his inspiration for entrepreneurship is someone else.

    “I admire Uday Kotak for his high ethical standards,” says Singh. “I admire the culture. That’s the culture that I am building here.”

    The Desi Lender: R Sridhar | Vice Chairman, Indo Star
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    RSridhar, as chief executive of Shriram Transport Finance, has decided on the destiny of thousands as a manager and as a lender to those who were buying used trucks. Nearly three decades after starting as an accountant and building a unique business in the country for entrepreneur R Thyagarajan, he has decided to take charge of his own destiny.

    He now wears the hat of a promoter with a stake in a non-banking finance company: Indo Star Capital Finance. As the vice chairman and chief executive, his first accomplishment has been listing the firm and he did that within a year of joining it. The market value of the company is Rs 4,775 crore.

    “I have always worked in Shriram and my mentor Mr Thyagrajan had ignited the flame of entrepreneurship,’’ says Sridhar. “He had been talking about the importance of entrepreneurship for the country.”

    Born into a family of farmers in Tamil Nadu’s Salem district, he graduated in commerce and took up an accountant’s job for Rs 500 a month at Orient Marine Products in Chennai’s crowded business district George Town. Identifying this youngster’s ‘abundant ambition’ to make a good life, the auditors of the firm showed Sridhar the way to earn while learning by persuading him to take up chartered accountancy.

    In his role as a junior accountant at the auditing firm, he came in contact with Thyagarajan, or RT, an office bearer at the cultural group Krishna Gana Sabha. And the result is the Rs 25,000-crore worth Shriram Transport. But what is he doing at Indo Star? “For an entrepreneur like me, there is an opportunity to build a retail business,” says Sridhar. “I brought commercial vehicle finance, and I have the freedom to do whatever business I want to build.” Indian retail lending is getting crowded with even the state-run banks stung by bad loans in corporate lending, turning to fund purchases of homes, cars and motorcycles.

    While Sridhar is a CA, his management skills are derived from practical experience of people behaviour; especially since he mostly lent money to people without much of an educational background or people from rural areas with aspirations.

    His association with a fine arts society in Chennai, where one encounters peculiar demands from members and audience, helped him learn to say ‘yes’ and judiciously decide to do the opposite. “It was at Krishna Gana Sabha that honed my people skills and management capabilities, which came in handy while managing talent within the company in the later years,” says Sridhar.

    Why a promoter instead of retiring?

    “It is a commitment. It is a good investment. Here I am deciding my destiny. I am running this enterprise, so I am taking the risk of running it,” says Sridhar.


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