NEWSMAKER: Deepak Parekh

Bankers' banker

Banking is in Deepak Shantilal Parekh's genes "" literally. His grandfather was the first employee of Central Bank. His father spent 40 years in the same bank and retired as deputy managing director. His uncle was the legendary HT Parekh "" the man who founded HDFC in 1977.

It was his uncle's insistence that made Parekh, then 34, leave his cushy job at Chase Manhattan in New York to join HDFC as a deputy GM. The rest, as they say, is history. The star of India's financial sector has to his credit the first merger in the country's private sector banking space "" Times Bank merging with HDFC Bank in 2001.

Seven years later, he is again the central figure in the largest merger happening in the banking sector "" HDFC Bank absorbing Centurion Bank of Punjab.

Parekh knows that the businesses that the HDFC group is in, need to achieve scale, like making a top-end acquisition in the western world. Back home, the moment the opportunity to acquire Centurion Bank of Punjab arose, Parekh responded with alacrity and grabbed it to lead HDFC Bank on the road to acquiring size.

Suggestions were made that HDFC should consider buying Northern Rock, the troubled UK mortgage lender which is now nationalised, or one of the sub-prime-hit mortgage lenders in the US.

But Parekh ignored the suggestion as he knew that HDFC did not have the scale to acquire troubled overseas companies, even if they were being sold at throw-away prices. So, for now, HDFC group's focus is on gaining scale within the country.

When Parekh says, "CBoP is an attractive route to supplement HDFC Bank's organic growth", it's a statement from a seasoned finance professional, clearly underlining the importance of scale. And the acquisition is not really to compete with its close rival,

ICICI Bank. The idea is to gain size through opportunities like CBoP, since Parekh feels that India needs many HDFCs and ICICIs.

A chartered accountant from London, Parekh wants to be on the top of things. However, in less than a year from now, he would be stepping down as executive chairman of HDFC. But he would continue as the organisation's non-executive chairman and, in the process, extend his reign at HDFC, and through it on other group firms including HDFC Bank, HDFC Asset Management, HDFC Standard Life Insurance and HDFC General Insurance.

A recipient of Padma Bhushan in 2006, Parekh also seems to have enjoyed a monopoly on memberships to key committees "" the Malhotra committee on insurance reforms, the Narasimham committee on banking reforms and the panel that did the groundwork for a housing finance regulator.

He is now a member of the Investment Commission, which is expected to make recommendations to the Government both on policies and procedures to facilitate greater FDI inflows into India. The commission would interact closely with companies in India and abroad to solicit foreign and domestic investments and act as a facilitator between potential investors and the official machinery.

As he moves closer to retirement from active hands-on management of the HDFC group, there is one unfulfilled task. HDFC as a mortgage lender did not do enough to meet the needs of the self-employed. So, the next couple of decades could see self-employed being the thrust area for the mortgage lender, even if it means taking more risks, something that's unusual for an otherwise conservative financial conglomerate. Will Parekh be game?