How did a five-member external jury select the BS Banker of the Year?

The jury picks Sandeep Bakhshi for ICICI Bank's remarkable turnaround in the face of a difficult legacy

For the second consecutive year, the Jury deliberated by video conferencing to select the Business Standard Banker of the Year 2020-21, owing to the pandemic-related restrictions. The year 2020-21 was the first financial year when the business world was held hostage by Covid-19. Naturally, the performance of banks and their chief executives was seen in the light of this once-in-a-century phenomenon.

The pandemic forced the government to impose stringent restrictions by the end of March 2020, to curb the spread of infection. This had an adverse impact on the Indian economy, which contracted by 6.6 per cent in 2020-21. For commercial banks, the financial year 2020-21 was marked by sharp interest rate cuts by the central bank, easy liquidity conditions, lacklustre loan growth, repayment moratoriums, emergency credit lines and loan restructuring.

At the same time, the Reserve Bank of India observed in its Trends & Progress of Banking in India that the banking sector navigated the disruptions caused by the pandemic and the economic downturn with resilience in 2020-21.

These were some of the aspects that the five-member jury needed to take into account. Needless to say, they had their task cut out. The five stalwarts from the Indian financial sector assembled on February 12 to pick up the best banker.

The high-profile jury was chaired by former Reserve Bank of India deputy governor S S Mundra. Its other members were Vice Chairman and CEO of Housing Development Finance Corporation Keki Mistry; former managing director (MD) and CEO of Bank of Baroda, P S Jayakumar, who is also non-executive chairman of VBHC Value Homes and Northern ARC Capital; Ican Investments Advisors Chairman Anil Singhvi; and A Balasubramanian, MD and CEO of Aditya Birla Sun Life AMC.

There were two criteria used for short-listing contenders. Banks needed to have assets of Rs 50,000 crore and above, as of March 2021; and 10 per cent or more growth in profit prior to provisioning in the preceding past one, two- and three-year periods.

Only 10 banks made the cut-off, and the jury further brought it down to seven for the second round.

After an in-depth discussion of the financials of these seven banks, the jury narrowed down its choice to three, after considering the quantitative dimensions. The discussions centred round matters such as governance, human resource practices, the regulatory stance, innovative practices, and technological prowess.

Finally, the choice was between two large banks.

In the end, the choice was unanimous. The jury declared Sandeep Bakhshi — the managing director and chief executive officer of ICICI Bank — as the Business Standard Banker of the Year 2020-21.

Bakhshi, who has been with the ICICI group since 1986, was appointed as MD and CEO of the second-largest private sector bank of the country in October 2018. The jury observed the remarkable turnaround of ICICI Bank under Bakhshi — in terms of both perception and performance — after inheriting a difficult legacy.

“He inherited a difficult legacy but steadied the ship over the course of the last few years with a mature leadership, as against the other contender who took over a stable organisation during the year,” Mundra said, while congratulating Bakhshi.

The jury also noted that on most parameters, the other contender either maintained the same ratio or showed a marginal decline, whereas ICICI Bank recorded growth on all the parameters.

Bakhshi is credited with reviving organisational morale and also bringing in a collaborative style of leadership, the jury members agreed. What finally tilted the scales in favour of Bakhshi was his style of leadership, and the fact that, importantly, the bank has not faced any adverse regulatory action under his tenure.

“Bakhshi showed remarkable leadership quality,” said one jury member. “It was a story of turnaround. The turnaround was not only in the banking business, but also in the subsidiaries,” said one of the jury members. Bakhshi has handled various assignments across the group in ICICI Limited, ICICI Lombard General Insurance, ICICI Bank and ICICI Prudential Life Insurance.

The jury members also noted that the morale of employees improved in the last few years under Bakhshi, who prefers to keep a low profile. 

Bakhshi took charge of ICICI Bank amid challenges on corporate governance issues, which led to rumblings in the board. That he steered the bank, and the entire group, out of those turbulent times was another factor that led the jury to deliver their verdict in favour of Bakhshi.

After steering the bank out of a difficult phase, Bakhshi received a two-year extension last year, until October 2023.

For 2020-21, ICICI Bank reported a net profit of Rs 16,193 crore, against Rs 7,931 crore in the preceding financial year. Its loan portfolio grew 13.7 per cent year-on-year to Rs 7.34 trillion, while deposits went up by 21 per cent year-on-year to Rs 9.33 trillion.

The bank had strong ratios, adequate provisioning, and low non-performing asset (NPA) ratios.

As on March 31, 2021, the bank’s gross NPAs fell to Rs 41,373 crore, which was 4.96 per cent of gross advances, from Rs 41,409 crore, or 5.53 per cent of gross advances, in the preceding year. The net NPA ratio fell by 30 basis points, from 1.54 per cent in 2019-20 to 1.24 per cent in 2020-21.

ICICI Bank is also well capitalised. The bank’s total capital adequacy as on March 31, 2021 was 19.12 per cent and Tier-1 capital adequacy was 18.06 per cent, compared with the minimum regulatory requirements of 11.08 per cent and 9.08 per cent respectively.