CEO, Axis Bank
Axis Bank CEO Amitabh Chaudhary On India's Banking Growth & Big Trends | Sonia Shenoy Sumit Podcast
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About Amitabh Chaudhry
Amitabh Chaudhry, CEO of Axis Bank, discussed the bank's strategic priorities and industry trends in several appearances. He stated that Axis Bank is confident it will reach a net interest margin of 3.8% over the next 12 to 18 months, describing the current NIM of 3.46% as a "cycle bottom." Chaudhry said the bank is focused on increasing its 5% market share in deposits by adding more branches and targeting rural markets. He noted that the bank had tightened credit standards on unsecured lending during a retail cycle but that disbursement growth on retail has since returned. Chaudhry also said the bank does not need equity capital for growth or protection. Chaudhry commented on the banking industry's investment in artificial intelligence, stating that AI presents a "great opportunity" but also brings risks, including cybersecurity. He said that while larger global banks have invested more in AI, Axis Bank is closing the gap and that in the next 6 to 12 months the gap "will be quite low." He asserted that Axis Bank is at the "cutting edge" of AI in the Indian banking system, citing feedback from global AI players. Chaudhry also observed that large institutions are becoming larger at the expense of smaller ones, as smaller banks cannot afford the same level of investment in technology.
Transcript (23 segments)
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Interviewer0:00
Hey guys, welcome to the money mindset. Today I have someone very special with me, someone who's been a part of the banking industry for over 30 years and for the last 7 years has been running the third largest private sector bank in the country. I'm talking about Amitabh Chaudhary of Axis Bank. He's here with me on the money mindset. Amitabh, thank you so much for being with
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Amitabh Chaudhry0:21
so much. It's a pleasure.
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Interviewer0:22
It's so nice speaking to you after a very, very long time. So happy to have this conversation. But how has life been for you so far?
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Amitabh Chaudhry0:29
Well, in Indian banking life is ever changing and there's always excitement every day. There is something exploding in some part of the bank all the time. But you know, you're part of a growing economy. So a lot of excitement. You can actually make a real impact. You can impact our customers. You can impact our employees. You can impact the way banking is getting shaped in this country. So having a great time.
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Interviewer0:54
That's important. Having a great time is the most important thing. It's been what? Over 30 years now that you've been in this industry?
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Amitabh Chaudhry1:00
So yes, to be able to you know, get up in the morning and be excited about what you're going to do every day is very, very important. Otherwise, you can't bring about any change in what you do. So I think maybe the people who work in Axis sometimes suffer me more than they would want. But you know, every day is exciting. That's the way I see it.
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Interviewer1:16
So you still get up every day with the same motivation that you did 30 years ago?
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Amitabh Chaudhry1:20
I don't think my energy levels have gone down. Maybe the way I deal with problems now and deal with people and how I push the agenda might have changed. People tell me I've mellowed down, which is good. Because I've realized over a period of time to achieve the same result you don't have to be jumping up and down. You can manage it without doing too much of it. So yes, the energy levels have not changed at all. Actually, I think they've gone up because I think more can be done. But yes, the style maybe has changed and maybe matured over a period of time. So in that sense, maybe the employees can work with me better than they've done before. But it has been I mean God has been kind. I'm only grateful for whatever platform I've got and what I've been able to do.
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Interviewer2:00
I have known you as someone who's you know I've watched you run your business for over maybe 7, 8, 10, 15 years. I've known you as someone who's really feisty, someone who doesn't mince words, someone who always says things as it is. Are you still that way?
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Amitabh Chaudhry2:15
I hope so and I do think so because I do believe it is very important to speak your mind. You don't have to be too blunt about it but it is important to get the message across. It is very important to get the message across to your customers, to your employees, to your shareholders because I think they appreciate it over a period of time. They respect you that what you are saying is what you believe in. It's not that you need to stick to what you say if the facts state otherwise or you learn over a period of time very happy to change my view but that's my view that's the logic to my view. And I think I do try to communicate that pretty consistently to all stakeholders of mine and that has at least worked for me. I think people do respect me and do value me for the fact that I'm not saying two different things to two different people. I'm saying the same thing again and again and I think even when you talk to the regulators or your seniors they would appreciate a view. I think a lot of people keep hedging so much that you don't even know which side of the fence they're standing on. I think sometimes important for people to be counted and for others to know which side of the fence you are on so they can actually have a real dialogue.
I believe as a result I connect better with employees, I connect better with the customers and they tend to appreciate your view also because they know you will have a view and you will express it and you will have a logic to it. It might not be right all the time. So I'm fully aware that the fact that I have a view doesn't mean that I'm right. The fact is that I have a view. And I'm happy for that view to be changed based on new data or someone else's perspective which I might not be aware of and I also don't form my views easily. I read a lot. I talk to a lot of people and I try to understand and appreciate where they are coming from and then form a view. So, it's important, you know, when you're trying to push your agenda or trying to push a vision that you're hearing a lot, you're listening a lot, you're reading a lot, you're meeting a lot of people and try to kind of just connect those dots and then form a perspective which people can relate to, can align to, can get motivated by because as a leader to ensure that not only people align but they're motivated. So keeps life interesting.
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Interviewer4:27
So, my core audience is, you know, a lot of young people who are between the ages of, say, 20 to about 35, 40 and a lot of people navigating their lives in today's day and age which is very challenging. So, my aim with this interaction is just to pick your brains to understand more not just about the banking industry but in general what's happening in India. But before that I want to get the elephant out of the room, so let me talk about that. The recent resignation of Puneet as CFO and, you know, he's somebody who's known to be very stable in the organization, someone who's been there for so many years. I wanted your view on how things are going to transpire henceforth. Is there any transition plan in place because I think that's what shareholders want to know.
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Amitabh Chaudhry5:09
So, you know, when you try to hire talent of a certain kind, you will have situations where these people will have aspirations. They will have a certain timeline in mind in terms of how they want to progress through the corporate world. And sometimes those aspirations cannot necessarily be met by the organization they're part of because, you know, the organization's context could be different. The positions that are potentially open might not be as much as whether they can meet the aspirations of the people concerned. We took a bet on Puneet when he was CFO of Tata Finance. At that time it was a relatively smaller organization and Puneet has done an incredible job. We are very proud of the fact that now Axis Bank has started contributing people to the banking industry and otherwise at large, which just goes to show the kind of talent we are hiring and kind of the leadership we are developing which people now value and they are going after. Obviously, some of these changes do cause some disruption, but they also lead to a couple of other things. One, it allows you to take bets on some new people. It opens up the organization for other people who we can take a leap of faith on and they can do bigger roles. So, it gives some growth opportunity to people concerned. It further reinforces our view that I think we're doing a good job with development of the leadership pipeline, so we need to do more of it.
And that's good because, you know, ultimately, they all become ambassadors of Axis. If they believe that they are moving in their corporate careers and Axis had a role to play in that, they're ambassadors of our bank and that's great because end of the day, we cannot, they cannot take Axis out of their system. And I do hope they cannot take Axis out of their system, so that is good for us. And from our perspective, you know, we know that this is a reality that we will keep facing situations if we are hiring a high potential talent that unexpectedly sometimes people will find opportunities and they will leave. So, you need to have
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Interviewer7:08
Do you have a transition plan?
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Amitabh Chaudhry7:09
So, you do succession planning properly. You know who are the people available in the system who could take over the job immediately. In some cases, if you know that people are not necessarily ready, you scan the market and ensure that you appoint people who can come and play the deputy role so that tomorrow if a position was to open up, they could easily take over the job. I think over the last four or five years, as we have lost people and we have lost senior people, there's been absolutely no hiccup. We have today a standing in the market where we're able to attract talent, we are able to develop the right kind of leadership and replace somebody quickly or attract the right talent from outside. I don't think that has been a problem.
You might be aware we recently appointed chief of AI. And we are delighted to have her in the system. She was running the McKinsey practice in India and South Asia for AI. And we are able to get this talent in because we thought that we need to invest in a talent of this nature. We needed someone to run this very important area of focus for us. And we were able to showcase that we are very serious about what we intend to do in AI. So, I believe that we are developing the right kind of leadership. And if we, for some reason, in some specific job, might not have the right person, we can attract the right person from outside because I think people see Axis as being very serious and developing the right kind of talent over the last five or six years.
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Interviewer8:27
So, in terms of a timeline,
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Amitabh Chaudhry8:28
It's a hiccup, but we'll manage.
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Interviewer8:30
In terms of a timeline, when will have the person in place?
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Amitabh Chaudhry8:33
In the right time frame. Absolutely not a problem.
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Interviewer8:35
Okay. All right.
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Amitabh Chaudhry8:36
See, I'm smiling while answering the questions, so [laughter] you know.