Earlier this week, when Poonawalla Fincorp announced that Arvind Kapil is the company’s new MD & CEO, it caught many by surprise. Except for a select group at HDFC Bank, industry executives in the banking sector say the move was barely anticipated, especially after he recently completed his silver jubilee at HDFC Bank

Known to be among the ‘close circle people’ in his earlier employment, Kapil was handpicked by Aditya Puri, HDFC Bank’s former chief, from GE Countrywide (his first job) in 1998. He was quick to rise to the top and at HDFC Bank, Kapil is recognised and credited for conceptualising and building the bank’s unsecured assets book. Presently accounting for over 15 per cent of the bank’s loan book, this is one of the few portfolios which never gave the bank any headache across business cycles.

In fact, the word on the street is that HDFC Bank’s unsecured book may be shades better than even secured loans. With Poonawalla Fincorp’s loan book half filled with unsecured loans, industry experts say Kapil is the best fit the Pune-headquartered lender could ask for. “His ability to control and pull back when times are bad, places him in a different league and that’s why people have appreciated Kapil over years for building a robust unsecured book much ahead of peers,” says a former colleague.

 Friends and colleagues call him a patient and result-oriented person who likes to take things along as per his plans; qualities which helped him move from unsecured loans to head the entire retail assets business of HDFC Bank even till its merger with HDFC Ltd.

Kapil's discomfort at the bank may have started months after the merger consummated in July last year. He was made head of mortgages after the merger. He became answerable for about 30 per cent of the bank’s business, which ironically wasn’t built by him but is troubling the bank on the profitability front. This may have not gone down well with Kapil. Post the merger, the retail business of HDFC Bank became too big to be headed by a single person. But when Kapil’s then profile was replaced by mortgages, it may not have cut ice with him,” said another former colleague at HDFC Bank. 

Perhaps that was the sticking point for him to consider other options. Meanwhile, Poonawalla Finance is believed to be undergoing its own transformation path, and bankers say Kapil may be a good fit for a new-age non-bank lender which is attempting to position itself as serious player in the arena, and moving from unsecured loans to secured loan products. Having seen and built both ends of the business, who better to drive the makeover at Poonawalla Fincorp, say industry experts. With Keki Mistry also at the helm, can the former HDFC group loyalists recreate the magic?