In a few months, private sector lender IndusInd Bank may have a new identity. The move was in line with the repositioning exercise initiated by the new management team led by Managing Director and Chief Executive Officer Romesh Sobti.
When contacted, Sobti said that the bank was looking at the option and had been authorised to explore the possibility of renaming the entity.
“We can go for a name change. But if you want to tell your customers that you have a new and improved offering to make, then the services have to be new and better. We have a three-year strategy and by the end of that period we would have improved the performance on various parameters. We are on course to achieve the targets that we had set for ourselves,” Sobti said.
He added that no names had been discussed and a mandate to look for options had not been given so far. While Indus Bank was one option, the origin of the name lied in Pakistan and could raise hackles in India. The other option was to simply rename the entity as IBL.
This will be similar to many entities, which had over time come to be known as through abbreviations denoting their names. For instance, Industrial Credit and Investment Corporation of India became ICICI and later went for a reverse merger with ICICI Bank, the bank promoted by it. Ditto for the Industrial Development Bank of India that last year renamed itself as IDBI Bank.
ITC has a long history of changing names. From Imperial Tobacco Company of India, the company was renamed as India Tobacco Company before donning its latest identity in 1974 to shed the image of being a cigarette manufacturer and instead position itself as a company with diversified operations. Similarly, Telco became Tata Motors and Tisco turned into Tata Steel.
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Typically, name changes take place after mergers or when a company tries to create a new image. For instance, last year, the AV Birla group, after acquiring L&T Cement, named it UltraTech. In June 2007, Hindustan Lever was renamed as Hindustan Unilever to draw the synergies with the Unilever.
Around the same time, UTI Bank was renamed as Axis Bank after differences cropped up with the UTI Asset Management Company. The fund house did not want the bank to foray into certain businesses to avoid direct competition and asked the lender to pay a fee for allowing it to use the registered brand UTI. UTI itself stood for Unit Trust of India, which launched mutual funds in India.
An executive said that the bank promoted by the Hindujas was looking at a new name to communicate the change in strategy. “In addition, IndusInd Bank is too long to make an impact. Management graduates are told that a name should not be longer than five letters,” said an executive.
For the moment, the bank has managed to do with changes in the colour combination at its ATMs and signages to attract more eyeballs. Unlike a change in name, this was not a costly affair.