Grandmother’s wisdom helped Sandeep Bakhshi turn ICICI Bank’s fortunes

Mumbai: The summer of 2018 was set to see the curtains come down on a three-decade financial services career. But destiny had a different idea. When turmoil engulfed ICICI Bank, the board of directors didn’t reach out to a powerful leader who would run it with an iron fist, but to one who would transform it with tenderness.

The choice was Sandeep Bakhshi, a lifetime banker and insurer at the ICICI Group who was hanging up his boots as the chief executive of ICICI Prudential Life Insurance Corp.

From an institution that shook investors’ faith to becoming their darling, ICICI Bank under Bakhshi has made a major stride forward. It is the ET Company of the Year 2022.

In a world that is familiar with theories of building institutions on innovations, engineering, and to some extent mysticism, Bakhshi did the opposite – build an organisation that is simple, collaborative and congestion-free.

Today, ICICI Bank is the second most valuable bank and its valuation is among the best in the industry. Fifty-one of the 53 analysts tracked by Bloomberg have a ‘buy’ rating on the stock, with the other two recommending to hold the shares.

How did that come about?

“What not to do is the most important thing,” he said in an interview. “Do simple things. Don’t go for any adventure.”

As Bakhshi set out to fix ICICI Bank, the main objective became serving the customer rather than how to milk the customer for revenue.

Bell Curve Scrapped
The effort was to make the bank a trustworthy institution for business rather than a bureaucratic one where inter-departmental processes became obstacles. Above all he eradicated the ‘eat what you kill’ attitude that shaped banker behaviour in recent decades.

“This may sound a bit utopian, but good organisations should have minimum internal tension, congestion and competition … It should be maximum collaboration,” said Bakhshi, who scrapped the Bell Curve formula for performance assessment and moved to team achievements on market share and profitability. “With bell curve, efficiency is the sufferer.”

That has reflected in its financial metrics.

In 2018, ICICI Bank reported its worst asset quality in a decade amid dwindling return ratios. Gross bad loans more than doubled in three years to 8.8%, while return on assets (RoA) halved to 0.9%. As Bakhshi moved to the granular retail lending from bulk corporate loans, gross bad loans fell to a seven-year low of 3.6% in fiscal 2022, while RoA crossed 2%.

When institutions are rocked with scandals or misgovernance, the first port of call for the CEO is usually a high-flying consultant like McKinsey or a public relations firm that could spin a positive image. What did Bakhshi do? Ruminate on his grandmother’s wisdom.

“When there used to be discrimination between boys and girls in the 70s, my grandmother used to say bhed-bhav mat karo (don’t discriminate),” said Bakhshi. “What is the concept of fairness? The principle that my grandmother used to advocate is what it is.”

Humility and team spirit come above all for Bakhshi who has banned the use of superlatives in promotions. To highlight the team’s achievement, he often places more thrust on centre half Ajit Pal Singh whose pass helped India win its first World Cup hockey tournament in 1975 when the nation celebrated Ashok Kumar’s goal.

Rebuilding is behind. What next? “There are no prima donnas in banking,” said Bakhshi.

ICICI Bank under Bakhshi will not have a head office.

The 11-storey tower in Mumbai’s business district will just be a “service centre”.