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The High-Tech Banker In India

Chief Executive K. Vaman Kamath of ICICI Bank Ltd. (IBN), India's largest private lender, likes to tell the story about how his automated teller machines spur change in a hierarchical society. Recently, N.R. Narayana Murthy, the chairman of Infosys Technologies Ltd. (INFY), India's premier high-tech company, was in line at an ICICI ATM on the campus of his company's headquarters. In front of him stood the company's janitor, who loved the machine. Why? He got to keep his place in line in front of the big boss. Had he been in a bank branch, the manager surely would have given Narayana Murthy preferential service.

ICICI's ATMs are breaking down traditional barriers across India. Nearly 2,000 of the machines can be found on street corners, at gasoline pumps, in office and shopping complexes, and even in rural locations. They are part of Kamath's strategy to transform ICICI from stodgy lender to corporations and state infrastructure projects to India's most technologically advanced and largest private bank. Since 1999, ICICI's customer base has soared from 100,000 to 15 million, about half of whom use ATMs. "The Indian customer is more than ready for transacting business with high technology," says Kamath, an engineer who got his MBA at the Indian Institute of Management at Ahmedabad before entering banking.

Kamath, now 57 and an ICICI veteran, was appointed chief executive of the Bombay bank in 1996. India's middle class was starting to assert itself, but a sluggish ICICI was not prepared to seize the moment. So he gave generous handshakes to complacent old-timers and hired hundreds of young managers, offering them "freedom and motivation" in a new meritocratic culture. The average employee is now 26, and most managers are in their early 30s. Kamath wrote off $1.5 billion in nonperforming loans, and diversified into consumer finance -- a big risk for an Indian bank, since for decades consumers came last in the closed socialist economy.

Today, ICICI controls a third of India's banking market. Assets are up from $1.4 billion in 1999 to $38 billion. The bank is even going global. By using low-cost India for back-office work, ICICI's Canada branch can offer depositors rates 25 basis points higher than rivals. "We want to be the No. 1 provider of financial services worldwide," Kamath declares.

That's a bold statement, but Kamath has played his part in bringing Indian banking up to global standards and beyond. Watch for those ICICI ATMs on street corners all over Asia.

By Manjeet Kripalani

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