A number of foreign bankers gave up their cushy jobs and moved to relatively unknown old private banks during the past few years. Vishwavir Ahuja, who once headed the Bank of America operations in India, took the plunge three years ago to join as MD and CEO of the Kolhapur-based Ratnakar Bank. Ahuja has had a busy time raising the profile of this quiet bank, modernising it and expanding slowly beyond its hitherto-largely Maharashtrian domain. He speaks to Business Line about his strategies and how he has steered the bank through the last few challenging years. Excerpts from the interview:

What brought you here after working in a multinational bank?

Professionally speaking, I and a few other like-minded people were at a stage in our career where we were wondering what to do with the rest of our lives. Many of us were not keen to continue in the foreign bank or multinational bank environment. For all that we had learned from that environment and all it did to give us this stature, all of which is good, is highly valued, respected and appreciated. Then, at some point, a human being evolves. How did you get people to join you?

When we hire people this is what we tell them – You will get low salaries, maybe some stock options, but of no value till we go public; you will have to put in at least 3-4 years of hard grind and lots of commitment. We tell them to invest their intellectual capital first and wait for the result. We will all be successful. When the bank does well, the value of the stock will go up and we will all be rich. This is our philosophy, our ethos and our culture and how we are building it.

Embedded in all this is the message that we are low-cost in structure, we have our traditional values and we are building on our legacy in a progressive manner. When it comes to the basic edifice it has to be modern. Technology, systems and the delivery engine through which we deliver services – this has to be modern. We have to build everything.

Doesn’t this presuppose that you have shareholders willing to wait a long time for returns?

We have chosen our shareholders like that. Our shareholders are for the long term. There is not a single FII. All are long term investors – from IFC, Washington which wants to invest for a period of 7-20 years, to CALPERS, to Gaja Capital, to HDFC. Three years down, when we are raising our second round of capital, they want to invest again. Not one has exited. They want us to make the bank solid, strong and have some momentum.

We asked our investors whether they are prepared to wait a minimum of five years. There was a lot of work to be done – in terms of changes – moving from manual to computerised core banking environment, union work force and lots of other issues. It would take some time to change, clean and improve.

How difficult was it to raise funds?

The first round of capital raising was very difficult. But after we started delivering, people were ready to invest.

Also, many investors bring in their own expertise, institutional knowledge which is very important to us.

So when do you plan to go public and list the bank?

It is on the cards and we are planning to list between 12 and 24 months time. It will depend on the Board and RBI pressure when exactly. And we ‘‘have to’’ think about it as the RBI has clarified its “expectation” that banks should be listed and hence, it cannot be delayed.

How has the support been from employees and unions?

We carried them along from day one. Nobody was asked to go or pressurised in any way. This resonated well. We wanted to make over our existing image and eventually build an institution of high scale and public respect apart from financial value creation.

I cannot blame the existing people for not knowing modern banking.

Hence, we straightaway started training with an investment of about 2,000 man days in the first year and now it has increased to 6,000 man days of training in grooming, English speaking, credit and negotiating skills among others.

What is the next challenge for you?

Now, what we need is scale. More branches, ATMs and build our brand. We already have mobile and internet banking. We are still thought of as a traditional bank or a co-operative bank.

Next challenge is to how rebrand ourselves while not losing our original sheen. We want to build the retail side of the bank to build more CASA.

Why would retail customers move from an HDFC or ICICI bank to Ratnakar bank?

In agriculture and micro areas, banks are not really reaching out. Door-step banking is actually in the urban centre but required more in rural areas. Effective transaction rises to 20-25 per cent more for the customers there. Hence, door-step banking is required.

What is your hiring strategy?

For about 30-35 branches to be added this year, we would be hiring about 300-400 people in the retail space and 100 in other departments.

We started with 600 people and today we are above 1,800.

How do you plan to expand further?

Retail expansion will be incremental at this stage. With good traction in SME and agriculture and meeting the priority sector lending target, we would maintain a decent 30-40 per cent growth given our small base.

On the branches, we are at 130 branches currently and will cross 160 branches this fiscal. So we are investing our profits in growing branch footprint to growth to 350-400 branches in 2-3 years with pan-India presence.

>beena.parmar@thehindu.co.in

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