Joining his uncle HT Parekh when Housing Development Finance Corporation was a virtual start-up 45 years ago, Deepak has built up the HDFC Group, now HDFC Bank, into India’s second largest company by market cap, currently marginally behind Reliance. (I might add, that in the recent past, on several occasions the HDFC Group companies together had a market cap bigger than Reliance).
With the effective merger date being 1 July, we took the liberty of delaying our issue for a few days to cover this historic occasion.
Deepak (he has been a close personal friend for 50 years) built the business, steadily. HT Parekh foresaw clearly that housing is a basic human need and aspiration. World over, after the Second World War, occupier owned housing spread rapidly. This drive also was an important driver of economic growth. Yet, unbelievable as it may sound today, the Reserve Bank had barred banks from lending money for housing, property being deemed to be a speculative activity! This was the gap HDFC filled.
Deepak pushed ahead determinedly but soundly, year after year. He always also had an eye on the future of the economy and the country. HDFC Bank was opened in 1994. And HDFC Mutual Fund followed. Then HDFC Life insurance was added as also HCFC Ergo general insurance. There were smaller niche ventures too like HDFC Credila for student loans. What is almost unbelievable, in the world of business, is that none of the companies ever faced a financial crisis and more importantly none of them ever got embroiled even in a whiff of a financial scandal or impropriety. And over the life of HDFC its bad debts totalled 0.04 per cent of all loans granted! This is a record unmatched anywhere in the world!
And right through his advice was sought by State and Central ministries and Governments and Indian business. He chaired innumerable committees and groups dealing with both industry level and national issues. Moreover, Deepak always found the time and energy to listen to, counsel and help Indian businessmen whenever needed. His advice, both public and private, was greatly valued.
But what left me astounded was that in his last letter to the shareholders Deepak hoped the HDFC tradition of fairness and kindness would be continued by the Bank. Fairness and kindness are not words associated with the financial world. Yet this was the ethos, set by the founder HT Parekh. It was followed in letter and spirit by Deepak. Never did we hear stories of hapless people being dispossessed of their homes. Time was given to pay and customers’ problems were heard and solutions found. This trust in customers was amply repaid. And there is no other institution where customers stood in queues to place deposits at rates lower than offered elsewhere. No other major financial institution in the world has been built on these principles. I may venture to say (and I suspect Deepak would agree) this could only happen in India.
Big as it may be, HDFC Bank will continue to grow in the future. Less than 10 per cent of Indians own their own homes. Most European countries are at a 60 per cent+ mark. That is how big the opportunity is.
Deepak is never going to ‘retire’. His advice and counsel will continue to be sought by business and industry and for the national interest.
But as he steps away from HDFC we can hear the thunderous applause.